Auction.com Finds a New Channel
- Mar 04, 2015
Auction.com L.L.C., already, the leading online real estate marketplace, is in growth mode and its latest move is the acquisition of Channel L.L.C. Auction.com is snapping up the real estate technology solutions provider in a cash and stock deal, the terms of which are not presently being disclosed.
It’s simple. “This announcement is mostly about accelerating our opportunity to move into the residential space,” Rick Sharga, an executive vice president with Auction.com, told Commercial Property Executive.
Formed one decade ago this year, Channel develops high-quality software products and offers a state-of-the-art real estate transaction platform with the ability to engage residential brokers and consumers in the disposition life cycle. The company is a perfect fit for Auction.com’s current strategy, but the merging of the two wasn’t precisely a plan that had been brewing. Essentially, the stars aligned.
“Part of [the reason why this is happening now] is simply the opportunity. We found a company with a technology that fits into our near-term and longer-term plans to migrate from being a platform selling distressed assets to being a company selling retail properties on the residential side,” Sharga said. “And partly it’s because we’re getting ready to begin that transition, so it was a little bit of timing in terms of where we are as a company and a little bit in terms of the opportunity presenting itself.”
With Channel under its umbrella, Auction.com will be able to expedite the expansion of its online marketplace by commencing the selling of move-in-ready residences, and the Channel transaction platform will allow Auction.com to merge the top broker-led deals with the transparency and reach of the online auction system.
Going residential is just one of a few steps Auction.com has taken in its bid to spread its wings. In January, the company announced it had expanded its hospitality business with the launch of a new division focused entirely on hotel property sales.
“One of the reasons we’re confident about making this move [into residential] is because of the success we’ve had over the past year in beginning that migration on the commercial side,” Sharga noted. So we’ve already begun moving from distressed properties to traditional properties in commercial, and at the moment, about 40 percent of the assets we sell are traditional non-distressed commercial properties. So that’s really given us more confidence than ever that our platform’s going to work across all these different property types.”
After the closing of the acquisition, Channel will become a wholly owned subsidiary of Auction.com, operating from its current office in Newport Beach, Calif., just 10 miles from its new parent company’s headquarters in Irvine. For the time being, Channel’s platform will not be entirely exclusive to Auction.com, as the software company’s current customers will still be able to avail themselves of the technology.
As for Auction.com, clearly, there’s more to come on the expansion front. Having unveiled a new iPad application last year, the company is now in the midst of developing new apps for both the iOS and Android platforms, and that’s just for starters.
Sharga added, “We’re exploring whether it would be advantageous for us to have similar operations in specific market sectors–for example retail, perhaps multi-family–so we’re looking at those as being possible opportunities.”
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