Queens, Manhattan condos are auctioned successfully

Some 350 individuals attended the second of two auctions, with approximately 220 of them having registered as bidders.

Bidding totaled nearly $15.9 million, including buyer’s premium, for 45 units sold Sunday in the successive auctions of condos that have been languishing in new developments in Manhattan’s Washington Heights and in Queens.

According to Mark Troen, chief operating officer of auctioneer Sheldon Good & Co., the average prices per square foot were approximately $300 for the 26 apartments in the New Amsterdam Condominiums in Washington Heights and $475 for the 19 in East River Tower–not bad for either immediate neighborhood.(East River was marketed as being situated in Long Island City, though some Big Apple residents dispute the location.)

“We pretty much met our targets,” Troen said.

For New Amsterdam, the original listing prices were said to have totaled $11,756,890, and bidders collectively bid $7,900,200, including a substantial premium of 10 percent.  The discount was 31 percent.  Also sold were 11 parking spaces for a flat $30,000 each.

Winning bids ranged from a low of $193,500 (plus 10 percent) for a 636-sf one-bedroom unit on the second floor that had been listed for $269,000 to $430,000 (ditto) for a three-bedroom, two-and-a-half-bath 1,488-sf penthouse for which the original asking price was $818,000.

That penthouse, one of four on the block, was the second apartment put up at the auction.  The first one offered Sunday was another penthouse, which went for $420,000 versus the original $838,750.  The highest-priced units generally seemed to offer the biggest bargains, if bargains they end up being.

Winning bidders find out that the rubber meets the road here as they sign contracts.

Developer Jose Espanal told me that he was happy with the outcome.  “We’re paying off the bank,” he said with a wide smile, adding that he was making no money on the project.  He hedged when I asked him whether he was losing money.

There were an estimated 250 persons in a Hotel Roosevelt ballroom, of whom more than 100 were registered bidders.

With 6 percent buyer premiums, the range for the condos in East River Tower was from a low of $300,000 to $567,500 (plus the premiums), which was the successful bid by the same man for the two biggest units on sale.  They each have 1,268 square feet and had been marketed for $835,000 on the 12th floor and $870,000 on the 14th.

Of the 19 apartments at auction, four had reserves, giving the seller the option of rejecting the winning bids.  Several of the condos were withdrawn during the sale because, Troen said, the prices were as predicted and could go only down, given typical auction dynamics.

Sheldon Good will attempt to sell the remainder to the 2,000 or so registered bidders in the weeks to come and will contemplate holding another auction if the company decides that course is warranted.

In all, the East River Tower auction garnered $7,954,770 in winning bids.  They represented 69 percent of the original prices and also a discount of 31 percent.

One somewhat unusual aspect of the auction was a Sheldon Good strategy of “buyer’s choice” bidding.  Winning bidders have can pick from a number of available condos–perhaps a dozen or more at a time at the start of each round–when they triumph.

In a way, bidder’s choice levels out the playing field, the company contends, and best establishes market value by making supply and demand transparent.

Because auctions impose their own biases–e.g. auction fever, among many other considerations–they do not gauge the market perfectly.  But they’re not far removed from it either.

In any case, I thought the auctions were among the best that I’ve been attending over the last year and a half.  Bruce Sayre, a 30-year auctioneer, was superb.  He was polite, careful to elicit true bids, likable, funny and professional.  And I detected not a single false bid shouted out by so-called bidding assistants.

It was one of the fairest auctions I have witnessed–and one of the most successful.

This would be a good place for me to extend a public apology to the company.  I erroneously chided it a while back for failing to advertise the upcoming event in the New York Times.  Apparently, I missed an insertion in early January, and I regret my oversight.

Predictably, many of those in attendance were looking for bargains that had to be unrealistically low.  They were disappointed, I am sure, yet their hopes are eminently understandable.

Properties, even auctioned absolute (without reserve), have a value that the market can be counted on to sustain.  That value has to be within the realm of reality, whether the developer or prospective buyers wish otherwise.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

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