LFC Offers an Alternative Selling Strategy

We are in the midst of an extraordinary economic slowdown which is forcing many real estate developers and investors to sell into depressed markets. With a gloomy outlook that could last several years, sellers really need to be resourceful and think outside the box of traditional brokerage. Sales transactions at most of the nation’s largest brokerage houses have screeched to a halt. Veteran CBRE economist Ray Torto recently spoke at an industry professionals meeting in Orlando, and he expressed his concerns that “the current slowdown is more similar to the Great Depression” and warned “that the nation’s commercial real estate downturn is already worse than the 1991 collapse and shows no sign of abating.”

LFC offers an alternative selling strategy – online auction. The pain sellers feel by constantly reducing their asking price time and again, just to realize they waited too long and the market has outpaced them, is overcome by the nature of an auction. An auction sets the price low – low enough to gain interest from potential buyers - and then allows the bidding process to push the price to the highest amount the market can bear.

Following the market down is a mistake, it is important to get out ahead of the wave of commercial properties expected to saturate the market in the next several years. Dr. Sam Chandan, President and chief economist at REEcon, a real estate advisory firm located in Washington DC, predicts that “default rates for commercial real estate loans will continue rising over the next few years, reaching 4.7% in 2010 and finally arriving at a peak of 4.85 in 2011.” Tony Villasenor, senior vice president at Voit Commercial, a commercial real estate firm believes, "These are going to be the toughest times we've seen since longer than I've been in the business, which is 27 years,"

LFC cannot create demand, but it can focus all the existing demand in a market on the property being auctioned; the highest bid at the end of the day is a pure appraisal for the property.

Online Auctions and Commercial Real Estate

More and more these days real estate investors are looking to the Internet as a one stop shop for everything real estate. Industry news, property listings, market trends and reports are just the tip of the iceberg when it comes to what is available to the Internet savvy investor. There is a myriad of commercial property listing sites such as Loopnet, Catylist, Property Line, Commercial Source and CoStar just to name a few, as well as major brokerage firms offering online access to their own company listings. The Internet has made it possible not only to search for properties located around the world but to do it from the ease and comfort of your home or office. LFC’s auction platform is the natural extension of this migration for real estate buyers and sellers to connect in a transparent and convenient marketplace.

As commercial real estate investors/developers continue to feel the pinch of tightening credit standards by lenders, declining commercial real estate values, challenging leasing environments and the deterioration of property incomes, many find themselves in cash generation mode. Sellers are searching for the most efficient strategies to market and sell their products. Proactive and realistic sellers have turned to auctions, which have proved to be an effective avenue for sellers anxious to clear their balance sheets. This is good news for buyers who recognize that auctions are a tremendous resource right now; it is a great time to secure low-priced assets in markets with strong long term fundamentals.

As the story goes, the commercial real estate market generally follows the path set by its residential counterpart; auctions will be more prevalent in the commercial market during the upcoming years of recovery. Rick Sharga, senior vice president for Irvine, CA. based search engine RealtyTrac says “Real estate is now at a tipping point. As more investors are buying properties through online auctions, that will become more of the general real estate process.” Recently an article titled "No place like home page", posted on Mediapost.com, highlighted the importance of auctions right now for the real estate industry, “Real estate attempts to avoid foreclosure by turning to online auctions…The internet might just be the thing for an industry desperate to avoid its own foreclosure”

Word to Buyers: take advantage of this perfect storm in the real estate industry, recession is not the time to be sitting on your hands!

FRE in the News

FRE's newest auctions have been creating quite a buzz. Not only have releases about the auction been featured on numerous websites such as Yahoo News and Forbes.com, journalists have included stories or briefs about them in print and online journals as well.

On January 21, Peter Mosca of RealtyTimes included FRE in his article "Builders using real estate auctions to stimulate business".

On the 20th our auction of 'Distinct and Unique' homes in Denver, Colorado was featured in The Rocky Mountain News in an article entitled "High-end homes up for auction" by John Rebchook.

The auction of 16 brand new condos at Brava was featured on January 21 in The San Bernardino Sun and Inland Valley Daily Bulletin in The Bizz section.


And finally, the Brava auction was included in The Desert Sun on January 18 in an article entitled "Retailers excited by arrival of the season" by Debra Gruszecki and Monica Torline.

Above: Interior shot of the Denver Brownstones from The Rocky Mountain News article

LFC in the News

Exciting news for FRE and Palm Desert real estate: Susan Belknapp at OC Metro wrote a story this week about our auction in Palm Desert (www.FRE.com/265R4).

I have included the article, in full, below:

LFC tapped to bolster Palm Desert condo sales

Newport Beach-based company will utilize its Web site Freedom Realty Exchange to promote sales of Brava.
By Susan Belknapp Published: January 06, 2009 10:36 AM

LFC Group of Companies, the nation’s leader in online real estate auction marketing has announced today that it launched a new auction campaign on its Web site, Freedom Realty Exchange to help bolster sales of luxury condos in Palm Desert.

The Coachella Valley developer began to close out its remaining 16 condos on Dec. 17 and will continue with a bid deadline of March 5.

The auction comes during a prime period for desert real estate, as predicted at the recent California Desert Association of Realtor’s 2009 industry forecast. Experts from Brea-based Real Data Strategies Inc., said, “2009 will be the absolute best purchase opportunity in the desert that we’ve seen for a long time.”

Brava is a gated community with available 2 and 3 bedroom condos, ranging from 1,865 square feet to 2,200 square feet. The properties are loaded with luxury features.

“Brava’s developer has the foresight to act confidently, staying ahead of the game with a keen insight into keeping buyers happy and moving development forward in any kind of market conditions,” says William W. Lange, CEO LFC Group of Companies. “They see that the accelerated marketing our online auctions offer can speed up the process of clearing inventory, allowing them to focus on newer projects.”

LFC Group of Companies has served numerous Fortune 500 companies during its 30 years in business, including real estate companies, investors, financial institutions and government agencies by auction-marketing thousands of properties with an aggregate value in excess of $5 billion.

You can also view the article here:http://www.ocmetro.com/t-LFC_tapped_to_bolster_Palm_Desert_condo_sales_1_7_09.aspx

Denver Home Auction

Here is to a new year of amazing auctions!

Today we officially announced our Denver "Distinct and Unique" auction over PRWeb. Here is a copy of the press release as it went out:

Let the Bidding Begin in Online Auction of Denver Luxury Homes

LFC Group of Companies Announces Newest Auction Campaign of Upscale Properties in Denver, Colorado

Newport Beach, Calif—Leading online real estate auction marketing firm, LFC Group of Companies, launched a new auction campaign of brand new homes in Denver, Colorado, on its residential real estate website, Freedom Realty Exchange (FRE.com/284R3). The auction, a builder closeout of high-end properties in the master-planned community of Stapleton and the charming town of Golden, began December 19, 2008 and continues with a bid deadline of March 5, 2009.

The properties, four boutique townhomes and four large estate homes, are the last remaining inventory of a well-respected local developer, and evidence that online auctions are quickly becoming a popular sales alternative for healthy builders and developers eager to accelerate sales through a marketing program that allows buyers to set the true market value of the homes.

The three communities are located within 25 minutes of Denver’s city center, close enough for residents to enjoy both the excitement of the city and the relaxation of suburban living. With minimum bids nearly 50% lower than previously listed prices, buyers have an opportunity to walk away with a piece of Denver real estate at a steal.

The properties in Stapleton to be auctioned include four multilevel homes in the Denver Brownstones, situated in the community of Westerly Creek. Distinctive architectural features and brick exteriors bring to mind downtown living, but without the hustle and bustle of a city center. Instead of facing a crowded street, the multilevel row homes look out over Stapleton’s 80-acre Central Park, providing residents with stunning views from their rooftop terrace, deck off of the kitchen, or front porch. The Brownstones enjoy over 3,300 square feet of living space, and feature luxurious amenities such as a penthouse, private elevator, and gourmet kitchen.

Also included in the campaign are three Urban Estates homes, located in the Eastbridge neighborhood of Stapleton. The grand homes, all over 4,000 square feet, feature 4-5 bedrooms, large living spaces, and spectacular views of the surrounding mountains. Impressive amenities in the homes include a Jacuzzi tub, gourmet kitchen, and guest casita. Exterior designs ranging from Mediterranean to Victorian reflect the innovative, one-of-a-kind look and feel of the Eastbridge neighborhood and the whole of Stapleton.

The final property, a ranch style custom home in Golden, features a sprawling floor plan and impressive exterior stone and wood detailing, situated on a lush piece of Colorado landscape. With 4,147 square feet of living space, this home includes four bedrooms, an exercise room, and a study, as well as a porch and recreation area. Views of the surrounding mountains from all sides make this home the perfect piece of real estate for enjoying the Colorado outdoors.

“The homes offered by this builder are diverse, yet they are all impeccably designed and very upscale,” describes Kelly Lovegrove, Director of Operations for LFC Group of Companies. “We are seeing more and more developers like this who see auctions as a smart way of doing business. Rather than lowering prices until buyers bite, sellers are letting the buyers decide what they want to pay—a powerful tool in times like these.”

Stapleton is conveniently located 15 minutes from downtown Denver and the Denver International Airport, with effortless access to the mountains via the I-70. The master planned community is innovative and diverse, encouraging business growth, environmentalism, and strong neighborhood ties. Designed for maximum mobility, businesses and entertainment are only a short walk or bike ride away. Several parks and nature spots, as well as numerous public art formations designed by well-known artists, all enhance the daily experience, health, and overall enjoyment of locals. A sustainable, environmentally friendly lifestyle is encouraged by Stapleton, which is the largest community in Colorado and one of the largest in the United States to have 100% builder participation in the Energy Star® program.

Golden, only 25 minutes from the city, is a budding town boasting both thriving development and close-knit, small town community ties, rooted in a strong sense of pride in its unique history. Featuring local entertainment, an annual fine arts festival, and a weekly farmer’s market, Golden encourages residents to participate in local events and support local businesses. Historic Downtown Golden offers an array of shopping and dining options, while the surrounding natural environment is filled with trails and camping spots for the more adventurous.

For more information on this auction, including detailed property descriptions, documents, and bidding information, visit www.FRE.com/284R3.

******************************************************************************

Freedom Realty Exchange® – a member of the LFC Group of Companies
For more than 30 years, the LFC Group of Companies has served numerous Fortune 500 companies, real estate developers, investors, financial institutions and government agencies by auction-marketing thousands of commercial, industrial, land and residential properties with an aggregate value well in excess of $5 billion. http://www.fre.com/

###