I don’t think you can call selling 53 waterfront condos in one day a flop. There was an auction last week that got a great deal of international attention. Combined with pre-auction sales over the last eight weeks, the current owners of the Oasis project sold 53 condos by last Saturday. Think about it, in this market, 53 condos is a large number. The auction served a number of objectives, some of which are not easy to recognize, most of which were met. A big one was not. The developers got national attention to their project and for Fort Myers. On the Friday before the auction alone, there were over 600 people that toured the towers – IN ONE DAY! Here is what the auction accomplished:
- Prospects Came to Town. The developer spent close to $1 million dollars informing buyers all over the United States by holding sales presentation in many major cities , here and in Canada. Our downtown office had walk in traffic daily. We even put up a sandwich board sign that said: “High Rise Tours Here”. All this publicity gave us great exposure. We sold condos. At Oasis, St. Tropez, Beau Rivage, and toured prospects thought many of the projects.
- The Mulitplier Effect. Those buyers that came to town to look at Oasis also looked at other condos and homes in Fort Myers; many bought.
- The developer exceeded the 50 “condos sold” mark needed to qualify Oasis for FHA underwriting. This was a big and important mark. Without fifty condos sold it was almost impossible to get condos financed and all 53 of these buyers had to pay cash.
- The developer raised over $10 million dollars. Or almost one fifth of what he put into the project so far
- There are now 53 new condo owners in the River District Why are some people calling this auction a flop? The big reason is the price. Even I predicted pricing would be above the $150/sf target. (The average price was $103/sf) Plus the developer stopped selling after his promised 40 condos. I do not believe that this low price will be the benchmark for future sales or appraisals downtown. The developer told everyone the auction was a once in lifetime opportunity. It was. Many buyers were upset that he stopped it at 40 condos. Perez was accused of stopping the auction abruptly. How do you stop an auction at 40 units gradually? Start selling half units?
There were many “Coulda. Shoulda, Woulda” pundits that left with their checkbooks and no condo deal because they wrongly assumed that the developer was desperate and this auction was a bank sale. It was not. It was an auction to renew interest in the project, give it a jump start, and perhaps move 125 units if the developer’s price objective was met. The developer failed to get this message across to the buyers, but understand, all these buyers had to be CASH buyers, this was not a normal arms length transaction where buyers get the chance to put financing together. All these buyers had to take a chance. Those that took it benefited from prices that I am sure will not be seen again.