Condo auctions draw many sales at big price cuts
(Crain's) — Two auctions of units in condo projects in the South Loop and Near South Side yielded more than 60 sales, at discounts ranging from 27% to 45% of the last asking prices.
In the larger of the two sales, 43 units were auctioned off at Michigan Avenue II, a 269-unit condo tower at 1400 S. Michigan Ave., at prices 27% less than the earlier asking prices, according to a report issued Monday by residential marketing firm Garrison Partners, which attended both sales but was not involved in either auction.
Meanwhile, 19 units were sold at a 51-unit loft conversion project at 2301 S. Michigan Ave. in the landmark Motor Row District at prices 45% less than the earlier asking prices, Chicago-based Garrison Partners says.
Yet in both cases, the prices exceed the minimum average price set for the auction, Mr. Benson notes.
"It's a declaration that the market has stopped going down," says Garry Benson, Garrison's president and CEO. "This proves that once you establish in the minds of the public a price/value equation, there is absorption."
At 1400 S. Michigan, sales prices average $278 a square foot, or about 152% of the average minimum price. Demand was so strong that one unit was added to the auction, Mr. Benson notes.
The auction was conducted by Boston-based Accelerated Marketing Partners LLC, which earlier this year conducted the sale of 45 units in the Vetro condo tower.
Related story: South Loop condos auctioned at big price cuts
Accelerated CEO Jon Gollinger says that at 1400 S. Michigan the average sales price was about $280 a square foot, including three or four units sold after the auction was conducted. He declines to comment on prices as a percentage of the pre-auction asking price or the minimum bids.
The auction should spark additional sales not only at 1400 S. Michigan, but also at other South Loop projects, he says.
"The market has not known what to purchase at," he says.
The 1400 S. Michigan auction did not include parking spaces, which go for about $35,000 a piece. About 25 garage spaces have already been sold, Mr. Gollinger says.
At the Motor Row project, the average sales price was lower, about $185 a square foot, or 58% above the average minimum price. The difference in pricing reflects Motor Row's location farther from the Loop, and that loft projects, with their varied floor plans, may not be as well-suited to auctions, Mr. Benson says.
Motor Row originally considered selling as many 28 units but pulled some back, Mr. Benson says. The two auctions will spark buying not only in those projects, but in nearby developments, he predicts.
A representative of real estate firm Sheldon Good & Co, which conducted the Motor Row sale, could not immediately be reached for comment.
