Heated Portland real estate market sees increased use of 'call for offers' to sell properties
Courtesy of Malone Commercial Brokers
Jennifer Small and Joe Malone of Malone Commercial Brokers represented the seller of 88 ½-90 Exchange St. in Portland. The brokerage firm used a call for offers to sell the property for $1.675 million.
The brokers that recently used a call for offers to sell an Old Port building say the method has become more common with the growing demand of Portland real estate.
A call for offers is similar to an auction because people submit offers rather than responding to a price set by the broker or seller. It also allows a buyer to dictate the closing within a certain timeframe.
The $1.675 million sale of 88 ½-90 Exchange St. used a call for offers because the brokerage firm knew there would be multiple buyers interested in the property.
“It’s not something for every property,” Jennifer Small of Malone Commercial Brokers said. “But in certain situations, such as this one, it does work. The upper Exchange Street block is a hot area.”
The bid from the final buyer, Rivendell Real Estate LLC, the owner of the RSVP Discount Beverage and Redemption Center building on Forest Avenue and several other commercial properties in Portland, wasn’t the highest of the 17 total bids. But Small said the brokers and seller chose that buyer partly because they felt it was the most likely to complete the sale in the desired timeframe.
The three-story, 7,092-square-foot building sold by Whaleback Associates LLC has eight upper-floor apartments and two ground-floor restaurants — Crooners & Cocktails and Tandoor, an Indian restaurant.
Small, who represented the seller with Joe Malone, also of Malone Commercial Broker, said her firm has used the process two or three times over the past year.
“It’s something that’s bubbled to the surface recently,” she said of using call to offers. “It has to do with the heated market and the lack of investment inventory.”
Still, she said, the process will not replace the more traditional process of brokerage listings.
Joe Porta of CBRE|The Boulos Co., who represented the buyer, said the call-for-offers method presents challenges to a buyer because the buyer doesn’t know how much it will take to win the property, as opposed to when a property is listed with a price.
“When it’s a call for offers, you’re bidding against yourself. You don’t know how others are valuing and underwriting the property. So it makes you put your best foot forward,” Porta said. “From the seller’s perspective, it only works in certain circumstances. You have to have a critical mass of demand.”
Another recent deal in the Portland area used a call-for-offers bid method — the $50.25 million sale earlier this month of three townhouse and apartment communities in Portland and Scarborough. The sale, which closed Dec. 1, was the largest residential property sale in the greater Portland area in recent history.
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