The old-fashioned land auction was beamed into the Space Age last weekend when bidders in New Jersey and Florida were linked by satellite for the sale of waterfront and golf-course lots on Florida's west coast.
Kennedy-Wilson Inc. of Santa Monica, the largest land-auction firm in the country, claims that the satellite auction is a first, at least in the real estate field.
"It worked perfectly. It was technically stunning," said Kennedy-Wilson spokeswoman Brooke Lauter. With the help of an AT&T satellite and a couple of transmitting and receiving dishes in Atlantic City, N.J., and Punta Gorda, Fla., Kennedy-Wilson sold 169 lots of 354 properties on the block. That was within expectations, Lauter said.
Atlantic City--specifically the Caesars' New Jersey casino--was selected for off-site bidding because of the interest in Florida real estate in the Northeast, Lauter said. Bidders at both auction sites were treated to food, drink, ice sculptures and black-tie orchestras while they watched their fellow bidders 1,100 miles away on 12-foot TV screens.
Kennedy-Wilson hired sports cameramen accustomed to fast cuts to handle the brisk pace of the auction, Lauter said. "It's very important for people to see the other side of bidding," she said, something they can't do with conventional phone-in or written bids. "If I lost a bid, I'd want to see that there was an actual bidder on the other side."
The Gulf Coast lots, located near Port Charlotte, are scattered through two developments called Punta Gorda Isles and Burnt Store Isles. The developer is Punta Gorda Isles Inc., more than 30% of which is owned by the wealthy Bass brothers of Texas. The publicly held company has recently had debt problems after posting losses for three straight years.
However, the auction was a way to dispose of some miscellaneous residential and resort lots and was not connected to the company's financial problems, said Alex Fogel, vice president of operations for Punta Gorda Isles. "Because the properties were scattered, there wasn't an ongoing sales program," he said. He added that the properties represent only a small portion of the company's Florida operations.
The auction raised $3.8 million, or an average of about $22,500 per lot. Neither Fogel nor Lauter would disclose Kennedy-Wilson's fee for arranging the satellite auction. Fogel said, however, that the cost "was in line" with what the company reaped from the sales.
"It was a very efficient way for us to broaden the horizon of the auction and to make it available to people outside the Florida area," Fogel said.
While auctions will never take the place of conventional marketing in real estate, they're becoming an accepted sales technique, Lauter said. With a satellite hookup, bidding can be done from a central location, even if properties are widely scattered. She said most buyers see the property firsthand before bidding, but points out that a satellite auction eliminates the need for a second or third trip to the property to participate in the sale.
Kennedy-Wilson is planning another high-tech link-up in June. This time, would-be buyers in Los Angeles and Hawaii can bid on 65 high-rise condominiums on Oahu (minimum bid $85,000) and 150 single-family home sites on Maui ($25,000 minimum).