Source : Business Times – 17 Sep 2009
Jones Lang LaSalle Inc, the second biggest publicly traded commercial property broker, is joining Real Estate Disposition Corp to start an online auction service to sell commercial property and loans.
‘In a stagnant sales market where interested investors are limited, using an auction opens up a property to a viable buyer marketplace,’ Jay Koster, president of Chicago-based Jones Lang LaSalle’s capital markets practice, said yesterday in a statement.
Real Estate Disposition runs www.auction.com, a website focusing on residential property sales. The site has sold more than US$5 billion in assets since 2007, Jeffrey Frieden, chief executive of the Irvine, California-based company, said in the statement.
It will now also sell commercial property and related debt as well as bank- owned real estate, Guy Ponticiello, managing director at Jones Lang LaSalle, said in an interview.
Commercial property sales in the US will fall to the lowest level in 18 years as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to data from Real Capital Analytics Inc.
US commercial property values have plunged 36 per cent since peaking in 2007, as mortgage losses forced banks to restrict lending. Would-be buyers await defaults by investors who relied on debt to make purchase between 2005 and 2007, when prices were soaring.
The auction process is a way ‘to find truly where the pricing is’, Mr Ponticiello said.
The venture’s first online commercial auction will be for 100,000 square feet of office space in suburban Dayton, Ohio, owned by Procter & Gamble Co. The sale, set for Oct 15, includes two four-storey office towers that housed the company’s food division, he said.
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