More than 100 people - both in person and online - participated June 12 in the bidding for 39 condos being auctioned with at a starting price of $58 per square foot for units in the new Altos de Miami tower recently acquired by a bulk buyer, according to a new report from CondoVultures.com.

The average winning bid price worked out to $118 per square foot for units with an average assessed value by the Miami-Dade County Property Appraiser of $156 per square foot, representing a 24 percent discount, according to the report based on Miami-Dade County records.  

The seller is a bulk buyer that acquired the units as part of a larger 56-unit transaction in March 2009 for $69 per square foot. The bulk buyer has since attempted to resell the units, but was only able to offload 14 units from the acquired portfolio at an average price of $135 per square foot, according to the report. 

"In this particular case, the auction approach appears to have worked for the seller, who has been struggling to sell the units on an individual basis for the last 15 months," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "Rather than continuing with a slow-burn strategy of selling one unit per month for the foreseeable future, the seller used the auction process effectively to generate 39 contracts in the course of four hours on a Saturday.

"Unfortunately for the seller but fortunately for the buyer, the auction crowd may have been hurt by the fact the bid process was held at the same time of the much anticipated World Cup soccer match between the United States and England." 

This was not an absolute auction where the units must be sold to the highest bidder. At the Altos de Miami auction, there was an unpublished reserve price that must be reached for a unit to be sold.

Under the terms of the auction, the seller has the right to accept or reject all high bids that do not meet the minimum reserve amount, according to the auction literature.

Winning bids on the 39 auctioned units ranged between $94 per square foot for a low floor unit to $202 per square foot for a penthouse with attractive but distant views of the Downtown Miami skyline and Biscayne Bay. The gross sales amount worked out to $5.1 million, according to the licensed Florida real estate brokerage Condo Vultures® Realty LLC.

On the low side, there were three units where the highest bid was less than $100 per square foot. An additional 22 units that went under contract to bidders who offered less than the $118-per-square-foot price average. On the high side, there were 14 units where the highest bidder agreed to a price higher than the $118 per square foot average.

Originally, the high bids worked out to a gross sales amount of $5.2 million, or $120 per square foot. However, the winning bidders on 13 units failed to meet the auction requirements to enter into a contract, prompting the units to be auctioned off a second  and even third time. The additional auctions dragged down the overall gross sales amount by $100,000 or $2 per square foot, according to the report.

Some 15 months earlier in March 2009, VH Miami Investments purchased 56 units for $4 million, or $69 per square foot, in the troubled 16-story condo tower. At the time of the bulk deal, 69 units had sold in Altos de Miami at an average of $181 per square foot, according to the report based on Miami-Dade County records.

The last auction of a bundle of units in a new Miami condo tower occurred on April 10 when more than five dozen units at the nearby San Lorenzo condominium, also in Miami's Little Havana, attracted a standing-room only crowd of more than 300 people, according to a recent CondoVultures.com report.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or view our Video Gallery. Looking for bulk projects direct from developers or lenders? Visit the Condo Vultures® Bulk Deals Database™. Our new books, the Official Condo Buyers Guide to Miami™ , Official Condo Buyers Guide To South Beach™, Official Condo Buyers Guide to Sunny Isles Beach™, Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and the First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

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