Multi-Family Portfolio

Business Challenge

An investment fund based in New York City purchased the notes to a large number of commercial and residential properties located primarily in the South Side of Chicago. The fund’s asset disposition team members had limited knowledge of the Chicago market and primarily were relying on local broker price opinions to determine market value.

Solution

The AW team toured the properties with the fund’s asset disposition team in order to assist in determining which properties to keep in their portfolio; which to dispose of quickly through auction; and which to offer through the traditional sale method. The AW team recommended bringing the multi-family properties (four triplexes) to auction, beginning with the three that were in a better location than the fourth. The AW team recommended a minimum bid (published reserve price) of $125,000 per property, in order to attract investors as well as potential home owners.

Results

The online auction of the three, higher value triplexes attracted over a dozen qualified bidders and resulted in a pre-auction bidding war. Ultimately, the highest price offered per property came from one investor who offered $162,000 per property with a quick, cash closing. The AW team brought the fourth triplex to auction thirty days later, and sold it pre-auction for $162,000 to the same investor who bought the other triplexes.