JLL joins online property auction sale

Jones Lang LaSalle (JLL), the second largest commercial property broker, will be working with Real Estate Disposition Corp to set up an auction service online in order to sell commercial property as well as loans.

In a statement yesterday, the president for capital markets at JLL, Jay Koster, said, “In a stagnant sales market where interested investors are limited, using an auction opens up a property to a viable buyer marketplace”.

According to Chief Executive Jeffrey Frieden, the Website, www.auction.com, is run by Real Estate Disposition and its focus is on the sales of residential property. The said site has already sold an asset of over US$5 billion since 2007.

JLL’s managing director, Guy Ponticiello, stated in an interview that the site will now also offer sales on commercial property and its related debt and real estate owned by banks.

According to the data analysis of Real Capital Analytics Inc, the sales on commercial property in the US will decline to its lowest level within 18 years as the property industry endures the worst fall down since the loan and savings crisis took place in the early 1990s.

The market value of the commercial property in the country have plunged to 36 percent since its peak in 2007, when banks were forced by the mortgage losses to limit their lending services. Potential buyers are awaiting the defaults by several investors, who are relying on debt in order to obtain purchases in 2005 and 2007, the period when prices were increasing.

Ponticiello said that the auction method was the possible way “'to find truly where the pricing is”.

The first venture of the commercial auction online will be an office space, located in the suburban Dayton, Ohio, which measures 100,000 sq. ft. The said property is owned by the Procter & Gamble Co.

The property for auction, which is set on 15 October, has two four-storey towers that housed the food division of the company.