81 E. Route 4, Paramus
20,000 Square Foot Office Building – Combined Sale Price of $3,425,000
The Challenge
In March 2021, Team Lizzack/Horning was hired by ownership for the sale of two condominiums, each 10,000 sq. ft., in a four-story mixed-use building on Route 4 in Paramus. The five principals in the partnership came to the conclusion that because they were all in different businesses and spread too thin, the determined it was time to dissolve their partnership. Darren and Randy educated them on the market conditions, and this resulted in targeting medical uses for the building. The partners, unfortunately, did not agree with their representative’s assessment regarding valuation, and the building entered the market at $350 per sq. ft., which was much higher than current market conditions would bear for this type of building/use.
Action
Several months later, during a conference call with Ownership, Darren and Randy introduced the sellers to David Levi from Ten X, to get an education about the auction process. The primary difference between a traditional sale and auctioning a commercial property for sale is all the due diligence is done up front with the collaborative effort of the sellers, brokers, and auction house to establish a managed process to complete the sale within a four month period from beginning to end. Another key difference is all the buyers get vetted out prior to the commencement of the auction; the buyers must deliver proof of funds in order to enter the deal room on auction day. Once the auction is completed, the buyer has 30 days to close and take title to the property with an all-cash purchase. In December of 2021, the auction was finalized and a buyer was under contract to acquire the third floor of the building (10,000 sq. ft.).
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