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Going Once, Going Twice, Going Nowhere…

I recently went to a highly hyped auction at 46 Easton Street last Friday – amazing, waterfront property worth in the 8 figures in my opinion. To put the quality of the property in perspective, although it is basically irrelevant because anyone can ask anything for their property, one of the abutting properties is currently on the market for $37.5m. Absolute auctions can definitely work. There are no “ifs”, “ands” or “buts” with absolute auctions – the highest bidder wins. For this reason, they create a buzz and get people excited. On the other hand, reserve auctions are typically dull and anti-climatic. You don’t know if there is going to be a winning bidder and no matter how much marketing and advertising is done, they don’t create the buzz an absolute auction does. This was a reserve auction. Guess what happened? Only two bidders registered (from what I could tell) and only one of those bidders actually bid, but not enough to meet the reserve. Basically worst outcome for the Seller – they used the auction process to get the property sold, but put the reserve too high and didn’t get it sold. Now the property is not sold and the market is confused if they are a serious seller or not and the property has a failed auction on its history.

$1.1bn closed YTD…