Got $29,000 for a half-built home in Chaska? Interested in discounted office condos, a warehouse office building in Minneapolis featuring sound-proof rooms or maybe some marked-down vacant commercial lots in Buffalo?
KleinBank is liquidating some 80 repossessed properties in a large online auction that's believed to be the first of its kind in the Twin Cities. While mass auctions of foreclosed homes have become commonplace, few, if any, local banks have headed to the Internet for mass auctions to liquidate distressed commercial properties and land piling up in a stagnant market, local pros say.
"I haven't seen a lot of this happening yet," said Jeffrey Larson, president of Eagan-based JBL Cos., which handles distressed property for banks. He called the online auction "a great concept to try to clean your books off."
Chaska-based KleinBank, with assets of about $1.5 billion, has fared well during a crisis that has seen many community banks around the state wiped out by bad commercial real estate loans. But it does have some distressed assets, and KleinBank spokeswoman Kathy Gilkey said the bank's just trying to be creative.
"This just may be one of the most appropriate methods for maximizing the return on the properties," Gilkey said.
The sealed-bid auction, already underway, runs until Sept. 30 and has minimum bids and unpublished reserves, meaning the bank can reject the highest bid if it doesn't meet a certain threshold.
The properties are displayed at www.LFC.com/914R2 and the lineup looks like a brief history of the real estate implosion around the Twin Cities: There's some houses and grassy lots meant for houses, office condos, retail buildings, warehouses and land for commercial development. The LFC Group of Companies out of Newport Beach, Calif., which is managing the auction, estimates all the properties together may be worth more than $10 million, but value is a tough thing to gauge in the current market.
LFC spokeswoman Kelly Lovegrove called KleinBank's one of the larger auctions it's done in terms of the number of properties. There's been a surge in activity in recent months as banks pick up the pace to sell property in an oversaturated marked by the end of the year, she said.
