Courtesy / Tranzon Auction Properties, The Fletcher Group at Keller Williams Realty
75 Park St. in Lewiston, a 10,000-square-foot office property, sold for $525,000.
October 14, 2022
Brokerage firm, auction company collaboration nets $2.87M in sales
Courtesy / Tranzon Auction Properties, The Fletcher Group at Keller Williams Realty
21 Fireslate Place in Lewiston, a 75,600-square-foot industrial property, sold for $1,294,650.
In a strategy that could be considered underutilized, a commercial broker firm and an auction company teamed up this year to sell five properties for a total of $2.875 million.
The joint venture offers sellers greater exposure for their properties, a firm sense of what the properties can fetch on the market, and a quick disposition if they choose to accept a bid, Kevin Fletcher, of the Fletcher Group at Keller Williams Realty in Portland, told Mainebiz.
“It doesn’t work all the time but, when it works, it works well,” he said of the joint strategy.
Fletcher teamed up with Tranzon Auction Properties, also in Portland, five times this summer and autumn to market properties in Mechanic Falls, Lewiston and Auburn that included 195 acres of commercial or agricultural land, an industrial building, an office building and two additional parcels of land.
Better offers
“I’ve personally bought and sold properties at auction,” said Fletcher. “It’s a strategic tool in our arsenal. If a property hasn’t moved or attracted the right attention, I will strategize with Tranzon about whether it’s a good fit for their sale process. At times, it’s a better than slashing pricing or taking a low-ball offer from an investor.”
Mike Carey, Tranzon’s senior vice president for sales, said he’s worked with Fletcher on many occasions on similar joint ventures.
Tranzon Auction Properties is a member company of Tranzon LLC, one of the largest real estate auction companies in the U.S.
“We typically team up for a joint call with his clients and talk through how Tranzon’s sales process could help get additional exposure and produce competitive bidding,” Carey said.
For each property, Tranzon and the Fletcher Group worked together to produce detailed property information packages, marketed the properties for four weeks and then had online bidding events.
“None of these clients were in financial distress,” said Fletcher. “However, they all had specific reasons to consider this approach and different rationales to move the properties in a timely manner. Plus, they had concerns about the current economic climate.”
He continued, “Converting these assets into cash allows them each to accomplish their specific goals. Each client and each property is unique, and the auction process can be a very useful tool when the conditions are right.”
Moving things along
The properties were:
- 125 Pigeon Hill Road, Mechanic Falls: 195-acre commercial property sold for $929,250 to a local buyer interested in the property as an investment or for future potential development.
- 21 Fireslate Place, Lewiston: 75,600-square-foot industrial property sold for $1,294,650 to owner/user Maine Cap ‘N Stem Mushroom Co., which cultivates a variety of gourmet mushrooms and is relocating their facility from Gardiner to Lewiston, said Fletcher. The seller built, owned, and occupied the building to operate Maine Bucket Co., a wholesale maker of wooden displays.
- 75 Park St., Lewiston: 10,000-square-foot office property sold for $525,000 to the city of Lewiston. The building was previously occupied by a law firm.
- 268 Cascades Drive, Auburn: 20-acre land parcel sold for $58,850.
- Kittyhawk Avenue, Auburn: 3.4-acre parcel sold for $68,200. Both Auburn parcels were sold by the Auburn Business Development Corp. as excess land after development of a surrounding industrial park.
Several factors play into whether it’s the right time to team up with Tranzon, Fletcher said. That includes the seller’s motivation to move the property in a timely fashion.
“The benefit with the auction strategy — and it doesn’t work for everybody — is that you know, on that particular day, what a buyer is ready, willing and able to pay for the property,” he said. “The seller is not obligated to accept the offer. But at times, rather than chasing the market down, if we’re not getting activity, or we don’t want to reduce the price, or simply accept what people are offering, this is an opportunity to expose the property and gain insight into the market.”
For instance, 21 Fireslate Place in Lewiston was under contract a couple of times through a conventional listing but never came to closing.
“That was a situation where the seller was getting frustrated,” said Fletcher.
The benefit of using the bid process for 75 Park St. in Lewiston, which also had some showings, was that the seller could see what the property would attract for offers, cash in hand and ready to close — and then could decide whether to move forward.
Average pricing at an auction is typically a touch less than the original list price, but can sometimes end up the same or even above, he said.
Joint ventures are not new, “but I’d say it’s not utilized enough,” said Fletcher, who has done similar deals going back almost 20 years.
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