Auction.com’s New CRE Partner and CEO
- Jun 09, 2015
Auction.com has partnered with Situs, with the latter company set to deliver due diligence services to the Auction.com clients for properties on the firm’s commercial real estate platform.
“Situs and Auction.com already had a business relationship—Situs was using the Auction.com platform to sell assets for its special servicer,” Rick Sharga, Auction.com’s executive vice president, told Commercial Property Executive. “As the two companies learned more about each other’s operations, it became apparent that there might be an opportunity for Auction.com to leverage the expertise Situs has in commercial real estate to create a new standard for due diligence.”
Set to begin in August, Situs will leverage a global team of employees, proprietary methodology and cutting edge technology to provide deeper insights into properties listed on Auction.com’s commercial real estate platform.
According to Sharga, the company will provide Auction.com’s investors increased transparency on the listed properties in a standardized format to more easily evaluate and compare investment decisions.
“It’s a perfect fit. Auction.com is committed to leveraging Internet technology to deliver a better—more transparent, more efficient—way for people to buy and sell commercial real estate,” he added. “Its online marketplace opens transactions to buyers from around the world; in fact, a very large percentage of winning CRE bidders are from outside the state where the property they’ve purchased is located. So having a way to provide enhanced due diligence to out-of-town buyers helps these buyers mitigate risk.”
Another consideration for the deal was how transactions are orchestrated on Auction.com since due diligence must be conducted up front, not after a bid is submitted. For this reason, Auction.com has an extraordinarily high closing rate—more than 97 percent of properties close within 30 days—and there’s virtually no “re-trading” after the auction is over.
“Having due diligence materials a buyer can have confidence in is incredibly important in this sort of scenario,” Sharga concluded. “Finally, making this sort of high-quality information available for all bidders helps to level the playing field, and allow smaller investors to bid with confidence against larger investment firms who might have more internal capabilities and resources to spend on their own due diligence.”
In other company news, Auction.com has named former Yahoo! Inc. CFO and interim CEO Tim Morse as the company’s CEO. Current CEO and co-founder Jeff Frieden will remain fully engaged with the company as Auction.com’s executive chairman.