Imagine a world where wining and dining and months-long real estate negotiations are a thing of the past. Imagine thatgot signed, sealed and money delivered quicker than it takes to play a game of golf.
Welcome to the nascent world of online retail real estate auctions, the latest twist in the growing auction market.
“It's an interesting concept. You're seeing it with homes — there isn't any difference,” says David Birnbrey, chairman and co-chief executive of the Shopping Center Group, an Atlanta-based retail real estate firm that represents big-box tenants. Birnbrey says he would try the concept. “It might be the best way to maximize your investment,” he says.
On the other hand, Birnbrey noted a few potential drawbacks: The loss of the human touch and the lack of time for investors to properly investigate, analyze and strategize.
But that hasn't stopped some retailers, including The Kroger Co., from auctioning real estate via cyberspace. And Sears is considering the format to get rid of excess real estate.
Kroger, the country's No. 2 grocer, recently leased space at one of its stores — in Columbus, Ohio — during a two-hour online auction. The highest bidder, the newly opened Grange Bank of Columbus, acquired the 10-year lease for an undisclosed price. It's the first in-store branch for the bank and only the second overall.
“It's a faster, cheaper and more efficient way of bidding contracts for all sorts of things,” says a Kroger spokesman.
The mechanism for the transaction: GlobalNetXchange (GNX), which merged in November with Worldwide Retail Exchange to create a new firm, Agentrics. In addition to auctioning real estate, the company, with dual headquarters in Alexandria, Va., and, brings dozens of retailers and suppliers together for supply-chain collaboration and other services to provide an automated, and therefore cost-cutting, system for procurement. Clients include Federated Department Stores, Sears, Carrefour, Target and Best Buy.