The press release just arrived, two days later than promised, and here it is verbatim (don’t worry, it’s not very long):
FOR IMMEDIATE RELEASE
REDC HOLDS NEW YORK CITY’S FIRST SUCCESSFUL
HIGH-RISE AUCTION FOR SOLARIA CONDOMINIUM
Close to 1,800 Pre-Registered and 550 in Attendance
New York, NY – November 23, 2009 – Real Estate Disposition, LLC (REDC), the nation’s largest real estate auction firm, conducted the first successful NYC luxury high-rise auction for the Solaria condominium on November 22, 2009, with the developer receiving bids and contracts on all homes.
“This auction was an incredible success,” said Robert Friedman, Chairman of REDC. “The buyers of these luxury condominiums got some amazing deals and the developer was able to sell many homes in just a few hours. We already have more than 21 contracts, with over $17 million in proceeds from auction day, and we expect to sell the building out over the next month in our post-auction effort. We will announce the final sold amount once the program is complete. ”
The event, which represented New York City’s first luxury high-rise building to use the auction process and the largest ever conducted in the Northeast, experienced a record-breaking turnout with over 550 attendees on-site at the Sheraton New York Hotel and Tower. Bidders had the option of attending and bidding in person or participating in the auction online through REDC’s live webcast portal, www.REDCLive.com.
“We have been receiving calls and offers from people who were at the event as well as people who were not able to make it,” said Joseph Korff, President and CEO of Arc Development. “Close to 1,800 people pre-registered by visiting the homes in person and online. We are working with REDC to deal with this tremendous interest.”
Any interested parties should contact the Solaria sales office at 718-884-0770, which will be open from 2 to 9 pm on weekdays and weekends from 10am to 9pm, to inquire about purchasing homes in this post-auction period.
What shall we make of the phrase “more than 21 contracts?” Does it mean:
- 33 buyers backed out?
- 33 buyers are awaiting mortgage approval?
- 33 properties had winning bids so low that the developer could not swallow them?
Your guess is as good as mine, though, of course, almost everyone reading the release will assume that the claimed “success” is not only hyperbolic but untrue. I suppose it depends on what your definition of success is.
Since my last post, I’d like to tie up a few loose ends:
- I neglected to mention that successful bidders must pay a 5 percent premium, which, when you think of it, is one helluva commission to which sellers conventionally commit.
- It would have been easy to miss, but I could not detect any Internet bids.
- According to commenter on a Wall Street Journal blog, many of the winning bids were on the seller’s behalf, but I can’t imagine how he would know that. “Dan” maintains that only 20-30 units were sold (subject to confirmation) to “real” buyers, as he put it, mostly on the lower floors.
- Says the commenter, “I think that if the auction would have ended with all units sold at the stated sold proce the auction would have been considered a success, but actually the average sell price for the real sales is 52-57% of the asking price. All other sales (ranging in the 60-72% of the asking price) are the seller bidding the highest bid. All the good – 3b higher floor apartments are not sold and do not have a binding bid for them. Wait and see, this is just the beggining, the prices these units will sell at the end (near future) will surprise everyone.”
So the Solaria saga goes on, and it’s been quite a ride. Especially for the developer, whose plunge down the first hill of his personal roller-coaster must feel not only terrifying but never-ending.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022
The Solaria has many negatives including no deeded parking, a location close to the highway, a lack of ammenities including a swimming pool and a decent size health club. The building does however have nice finishes and some apartments have execllent city and river views. Why is the Solaria in the situation it is in now? The answer is Joe Korff the developer. Over the last couple of years he has received many offers for apartments a lot higher than what he received during the auction. Why didn’t he accept any of these offers? . . . Several articles say the auction received bids on every single apartment. This is correct but some of the winning bids were on behalf of the developer. According to the auction rules the developer can bid on any property. My guess is that there is around 20 real bidders with winning bids below the reserve prices. What are his options now? Well according to the auction rules he has until next Wednesday to notify bidders who did not meet his unpublished reserve if he is is willing to move forward with these deals. Joe said the auction is going to let the market speak and reveal the realistic prices for Solaria. Well the market has spoken and the million dollar question is what is Mr. Korff going to do now? So Mr Korff what is it going to be?
The whole process is becoming murkier, the developer inviting people to contact the sales office. There were 1,800 people because of the interest in what is going to happen to all these units.
Where does this leave the other Riverdale projects like Riverstone and Riverdale Court Condominium? How many new units remain unsold in Riverdale?