A South Florida developer sold 33 new condo units, including 17 units to one buyer, for 46 cents on the retail dollar at a private auction on Nov. 17 in West Palm Beach, according to the Palm Beach Post.
The total sellout price of Saturday’s 90-minute auction was $6.3 million for Downtown West Palm Beach product that had previously set a retail asking price of $13.7 million. The discount reflects a 54 percent decrease off the original asking price.
Properties in The Edge sold for prices ranging from $195 per square foot for a 671-square-foot, one-bedroom unit that traded for $131,000 to $245 per square foot for a 1,175-square-foot, two-bedroom unit on the pool deck that went under contract for $290,000.
Given the deeply discounted prices realized, the developer Wood Partners decided to only sell 33 of the 41 units that were originally scheduled to be auctioned off to the highest bidder.
It is unclear what the developer plans to do with the remaining inventory, whether that inventory was withdrawn from the auction block or never made available at auction.
"We didn't get the number we wanted at all, but no one else is selling, so you've got to start somewhere," Jon Gollinger, the head of Accelerated Marketing Partners which handled The Edge auction, told the Palm Beach Post.
Unlike many other developers saddled with excess inventory, Wood Partners decided to attempt to unload the excess condo inventory at auction rather than sell out in a bulk deal to an opportunistic fund, according to the article.
Apparently that strategy didn’t work as a one buyer, who refused to give her name, purchased 52 percent of the units that were sold, according to the article.
Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .
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