Ten-X, formerly Auction.com, the company best known in L.A. real estate circles for selling Manhattan Towers last year for $96 million, is launching a traditional sales platform for buyers and sellers who aren’t sold on the auction process.
Ten X-Commercial, the company’s new commercial real estate site, is designed to offer buyers and sellers two new ways of transacting. They can use an alternative two-step process whereby interested buyers submit sealed bids to qualify for a short list that will compete for a property in a scheduled online auction, or they can avoid an auction altogether and just submit and manage active bids online.
“Not every property type lends itself to an auction environment,” said Rick Sharga, an executive vice president at the firm. “Not every buyer and seller is comfortable with participating in an auction. If you look at triple net leases or 1031 exchanges, we think the new platform will be better suited for that. It gives us an opportunity to play in areas we haven’t been able to play in before.”
In the case of non-auction deals, sellers can name their asking price, what kind of financing they’re willing to accept and an acceptable due diligence period. Unlike in an auction environment, the best price won’t always win.
The company, which was formerly known solely as Auction.com, has been making moves in recent months, including the name change, to market itself as a company dealing in prime, Class A assets. In addition to Manhattan Towers in Manhattan Beach, the company recently sold 801 North Brand and 700 Central in Glendale for $73 million.
In the first several years after it launched in 2007, it primarily sold distressed commercial inventory.
“The big change in the last couple of years has been that more and more of the properties sold have been traditional, high-quality, non-distressed properties,” Sharga said. “About 60 percent of the properties we brought to the market last year were traditional pipeline properties.”
Executives said the company’s aim is not to replace commercial brokers but rather to provide a tool for them to manage a transaction. Sharga said 99 percent of the firm’s recent deals were completed in partnership with a local brokerage firm.
“We’re excited to become more aggressive in reaching out to the broker community,” he said. “Brokers initially looked at us as potential competition but I think we’ve come to the conclusion that we’re at our best when we’re working with a local broker. We’re in the midst of figuring out a fee structure for that.”
Ten-X’s added value is in its national and international reach, he said.
“We bring things to the party that your local broker doesn’t have access to,” he told TRD. “What we’re really good at is marketing these properties. We really open up these properties to the broadest possible range of buyers. In the case of Manhattan Towers, the price we were able to generate was actually a few million higher than what their estimate was for what they could get from a local buyer.”