The current dislocation of commercial real estate in the United States is attracting its fair share of opportunistic and distressed asset funds. But when it comes to getting these types of assets into the hands of buyers, firms are mixed when it comes to the best way to get these deals done. Online commercial real estate auction platform AuctionPoint, which is expanding with a recent strategic investment, indicates sales are moving to an online environment. Auction Point provides real estate brokers with a means of selling property at full market value. The recent investment, financial terms of which were not disclosed, comes from MySpace co-founder Tom Anderson, who will join the company’s board of advisers and provide guidance on technological developments. Tom’s strategic investment is part of the company’s nationwide growth into social media and viral marketing. It supplements the recent investment from online commercial real estate marketplace LoopNet. “I believe AuctionPoint’s business model of bringing sophisticated technology to an otherwise traditional industry is a game changer,” Anderson said in a statement. “AuctionPoint is shaping how commercial real estate deals get done, and industry players are realizing that these new ways of doing business are essential to jumpstart the marketplace.” According to commercial loan modification and short sale service provider Strategic Asset Services (SAS), other companies are not seeing the demand for brokers to act as in-betweens for commercial real estate sellers and buyers and see a diminished role for these players in the future market. Investors are increasingly collaborating directly with borrowers to acquire interests in distressed commercial real estate. “Often commercial real estate borrowers are able to negotiate a short sale or discounted note purchase,” said SAS executive vice president Kevin Levine in a statement. “But they lack the financial resources to consummate the transaction.” Third-party investors are able to acquire control of the commercial property at a low price trough a short sale or discounted note price, according to Levine. By retaining the borrowers in the transaction, the investors preserve their continuity of management of the real estate and, in the case of an owner-occupied property, their continuing tenancy. Dan Gorczycki, a managing director of Savills US, has the opposite view. “People are lending and the market is active, but the only people selling are those being forced to sell,” he says, adding that mortgage brokers are needed right now more than ever because “people can’t just pick up the phone” and get easy credit. Write to Diana Golobay.
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