Terrazzo Auction Results – SOLD! (well, mostly)

So I’ve just returned home from the much-advertised Terrazzo auction. Being a first-time event for our urban condos market, many were skeptical. Reserve pricing had been advertised from about $190 per square foot (approximately a 50% discount from recent asking prices) on 31 units with 11 varying floorplans. I had estimated that units would be salable in the $230-$250 per sq.ft. range, but I had reservations as to whether that would be acceptable to the sellers. This was not an absolute auction – sellers had the right to add or withdraw any units during the course of the auction. Well, as it turns out, I was spot on for the going rate values. Crosland seemed somewhat pleased with the results, though they did withdraw several of the penthouse units when the first one sold just above reserve pricing.

Rumors say that there were 160 registered bidders. The room was full, but it didn’t feel quite that full.

The first units to hit the market were four of the “W” plan = 1 bedroom + den, 1 bath, 1 parking @ 885 sq.ft. Initially priced in 330k range with reserve bids  from 170k. Final sales prices fell in the 211k to 220k range representing $238 to $248 per sq.ft.

Next on the block was a large penthouse at 3bed/3bath with 2090 sq.ft.. Historically marketed in the 700’s, the opening bid was 399k. Final sales price was just $413,000 scoring the winning bidder the very best deal of the day at just $197 per foot. Crosland promptly withdrew the next penthouse unit from the block in an effort to avoid more loss.

The auctioneer went on to sell fifteen other one and two bedroom units from $212 to $265 per foot. The leader of the Accelerated Marketing team then took the stage and announced that he felt they had reached consensus on fair market values. He withdrew the remaining thirteen homes from the block and invited prospective buyers to gather up front where they could come to quick agreements on the remaining units.

I mingled with the crowd and overheard developers shouting out final sales prices on five additional homes from between $222 to $236 per foot. A few others may have sold after I departed.

Like it or not, this auction seems to have set the bar for fair market values on urban, chic, and luxurious condos and flats. It should be interesting to see how ICON, Encore, Rhythm and Velocity react. I do not expect them to reduce pricing to the same levels, but it should be much easier to negotiate on pricing.  I spoke briefly with Crosland president Bill Barkley after the auction. He couldn’t guarantee that future buyers would be able to get the exact same prices, but he did insinuate that there were more deals to be had.

I’ll tell you one thing I like about this auction  – the transparency in pricing. Us agents in the urban market have been complaining for years about some of the tactics at Bristol/Village and Giarratana/Novaire. They’ve made it quite difficult to research historical sales prices. They’ll allow active properties in the MLS to expire rather than inputting closed prices. Similarly, the tax records often reflect just one address for the whole building (instead of individual unit numbers). This can make it very difficult to research sales comps for prospective buyers.

If you are thinking of jumping into the urban condos market, I’d love the opportunity to work with you. My office location in the Gulch is right next door to Terrazzo. Let me know if you’re interested scheduling a tour – no sales pitch, zero stress, just an agent with great connections and experience in the urban market.