Going Once, Going Twice . . .
Sperry Van Ness/Fisher Auction Co. accelerates marketing for commercial real estate sellers.
Susan H. Fishman

One of the greatest myths in the real estate auction business may be that the process only works for distressed properties.

Louis Fisher III auctions a property recently.

When experienced sellers of real estate in any phase are looking to alleviate enormous holding costs and buyers are looking for a reasonable price, they often turn to an Auctioneer — and they often turn to Sperry Van Ness/Fisher Auction, Co., Inc., based in Pompano Beach, Florida.

For 38 years, the Fisher family has sold real estate in a variety of formats across the country and beyond. Louis Fisher, Sr. established his real estate company in the late 1960s and, in 1972, his son, Louis Jr., migrated the firm into the Fisher Auction Co., selling real estate exclusively by what the Fishers call “accelerated marketing” — real estate auctions, sealed bids and sealed bid auctions. In October 2001, the company became National Auctioneer for Sperry Van Ness, the fastest growing commercial investment and brokerage sales firm in the U.S. Today, Sperry Van Ness/Fisher Auction Co., Inc. is an internationally recognized leader in the accelerated marketing industry, having sold 18,000 properties in 46 states, Mexico, Puerto Rico and the U.S. Virgin Islands.

Louis Fisher, III represents the third generation of the family business and along with his brother, Lamar, own and manage the company, which specializes in commercial assets across all product lines, including vacant land, office, industrial, hospitality and retail. Services include conventional transactions, auctions and sealed bids of real property, loan portfolios and personal property, as well as consulting services, appraisal services and an affiliated management division for hospitality properties.

A recent auction by Sperry Van Ness/Fisher Auction Co.

For its clients, Sperry Van Ness/Fisher Auction Co. is able to guarantee that it will spotlight a property by marketing in various publications and guarantee a force of decision on behalf of all prospective buyers in the marketplace, whether they were originally involved (before Fisher became involved) or whether it was a response to the company’s advertising. The company also guarantees to provide market value under the terms of the transaction.

“We reversed the process,” notes Fisher. “Conventionally, you market a property and establish a price, buyers negotiate against the seller for the most favorable terms, then due diligence takes place. What we do is require all the buyers to do their due diligence in the pre-sale because the seller is the one who dictates the terms. So the pricing paradigm is removed from the equation on a momentary basis.”

The result is that everyone is allowed to compete on the same playing field, adds Fisher.

“It gives you an opportunity to have maximum competition and to create maximum value, with a certainty to the process. We’ve now done 11 major transactions throughout the country for clients of this nature.”

Louis Fisher III, owner of Sperry Van Ness/Fisher Auction Co.

“Brokers continue to play a very important role in what we do,” says Fisher. “We are brokers, but in all of our sales, we will usually list the services of a broker. To the best of my knowledge, we are the only firm that has that true affiliation with brokers who are out there to help us and are also out there pitching services to their clients.”

Fisher’s client list includes GE Asset Management Inc., Developers Diversified Realty and Bayview Financial. Recent auctions/sealed bids include Cedar Knoll Galleria in Ashland, Kentucky, which sold for $5 million and The Cadillac Hotel & Resort in Miami Beach, Florida, which sold for more than $14 million.

The auctioneer was one of nine national companies selected to conduct multiple asset auctions and sealed bids throughout the U.S., Puerto Rico and the U.S. Virgin Islands for the Resolution Trust Corporation and the Federal Deposit Insurance Corporation. And it recently pioneered the first series of successful real property foreclosure auctions in the Southeast on behalf of a major lending institution. The firm also has national and local experience with court ordered sales for many U.S. Federal Bankruptcy Divisions and State Circuit Court Divisions.

Sperry Van Ness/Fisher Auction Co., Inc. has also followed the current trend of online auctions conducted by professional Auctioneers. Online auctions are very effective when you have a property that’s rather easy to value, says Fisher.

“If you have one that’s in an emerging market where there’s a pent-up demand and not enough supply, it’s very difficult to establish a value,” he says. “With a hard-to-value asset, you might have a wide spread between someone willing to take X and someone willing take Y. At a typical live auction, the one who’s willing to pay the top amount only has to bid a fraction above that next level.”

Fisher adds that the online component works well on residential properties, because they’re easy to value and you can get comps and appraisals and reach out to a broker in the area, but the commercial market will eventually catch up to the online format, as well.

“I don’t necessarily see it as something that’s going to evolve quickly with commercial property,” he says, “but with residential there’s no question.”

Fisher Auction Co. recently sold 2,000 properties for a government agency online for a total of $65 million — $19 million more than the appraised value of the combined properties.

“What we found is that today’s culture is such that when someone makes a decision to buy, whatever it might be, and they are comfortable with the terms, they want to do it on their time,” Fisher notes. “So the online platform provides them the ability to do that.”

Online users enter the Fisher auction eBay-style with a user ID and password. Those who don’t register are not able to bid but can still view the bidding taking place. But unlike eBay, there’s no last-second bidding allowed. When a high bid is received, the time is extended by 5 minutes for response bids until no more bids are received in a 5-minute interval, and then the auction concludes.

No matter what the auction format or what the current real estate cycle of a property, in a market of rising interest rates, you don’t want to get locked in to a property that is forced to refinance at a much higher rate, Fisher advises. Auctioning your property may be the ticket out.

“As the market is correcting today, and you see interest rates going up and the commercial mortgage bank security loans coming due, we’re seeing very heavy activity with people wanting to sell,” he says. We can come in and offer a gauge as to what the selling price should be in order to create maximum competition in the market.”