When Los Angeles auctioneer and software executive William Stevenson planned the simultaneous sale of 79 residential lofts in the city’s historic financial district on Feb. 8, he had no idea how successful the event would be.
Sixty-two of the renovated lofts in the 13-story downtown Rowan building sold for a total of $21.8 million in the electronic auction. Buyers who attended the event were able to see all the bids on large screens at the front of the auction room, while remote bidders used computers to participate. The auction was unique in the large number of units sold simultaneously on the Web rather than in traditional sequential fashion, which offers one item at a time.
Winning bids ranged from $207,000 for a studio to $534,000 for a two-bedroom, two-bath penthouse. More than 250 pre-qualified buyers registered to participate in the three-hour event.
“The success of this auction confirms that there are plenty of prospective buyers sitting on the sidelines because they are uncertain of values in this real estate market,” says Stevenson, a partner in Downtown Properties and president of Intelligent Market Systems, which developed the proprietary Intellimarket software used in the auction.
Nobel Prize nominee and California Institute of Technology Professor Dr. Charles Plott designed the software, which has not only been used to auction properties, but also to market commodities from natural rubber for United Nations agencies to fishing rights in Australia.
During the Los Angeles loft sale, the auction clock reset each time a new bid was entered. The auction ended when no bid had been submitted on any property for five full minutes. That occurred about three hours after the sale began.
The auction was necessary because the building’s completion had been delayed, says Stevenson. Earlier, about 120 of the 206 units had been sold, but most of the sales were canceled because of the delays, in which the economic downturn was a factor. “We lost almost 100 buyers,” Stevenson says.
Over his career, Stevenson has conducted such high-profile auctions as the $411 million sale of six Landmark Resorts golf courses and hotels for the Resolution Trust Corp., and a $200 million sale of long-term contracts for Shell Chemical. His real estate brokerage company, William Stevenson and Associates, listed the lofts, in addition to conducting the auction.