CHALLENGE: How to sell over 20 residential homes in an accelerated timeframe.

The Lumen condominiums, a 4 story mixed-use 93 unit residential building, anchored by a flagship full-service QFC market, and located in the heart of Seattle Center, launched its marketing and sales campaign in 2006. Following an extravagant grand opening, thebuilding reached near sell-out at preconstruction prices. However, when construction was completed, only one-half of the units closed. As the market receded and prices dropped by an excess of 25% from peak pricing, the developer was only able to close 65% of the building. Consequently, well over 20 units were left to sell once the building was complete.

With this remaining inventory, Lumen faced the problem that is occurring in new urban core locations throughout the country: Developments in these urban environments occurred faster than demand allowed. Lumen’s unique architecture, featuring contemporary concrete, glass and steel design elements, further narrowed the buyer pool.

As the market continued to recede, Lumen’s sales begin to dramatically falter. At the time of the auction launch, no units had closed in nearly one-year. This left an end user market that was predominantly an out-of-town absentee owner, resulting in a narrow buyer segment. With over 20 units left to sell, traditional marketing was unable to cast the net to a varied pool of interested buyers, and a very serious problem was created, including mounting pressure from the developer’s investors and construction lender.

JLP Auctions implemented an extensive technology and media based marketing program using a variety of local paper, internet and television as the medium to re-launch Lumen’s story.

An indication of the marketing program and the values potential bidders could achieve byparticipating in the auction were conveyed through a targeted press outreach. Within the span of an aggressive 30-day marketing campaign, public curiosity about the auction process, the productavailable and the achievable discount buyers could receive at auction was highly peaked. Consequently, over 1,200 traffic groups were driven to Lumen’s sales center.

SOLUTION:

With the new, highly interested pool of potential homeowners, the result of the marketing program culminated in a public auction marketing event, held at the downtown Seattle Grand Hyatt.

Sixteen units were sold in sixty minutes at this public auction, for an overall gross sell out of just under $6,000,000 — an outcome that would normally take developers in the Seattle market a minimum of over one year to achieve, based on current absorption rates. Auction pricing achieved nearly $350 per square foot, which represented a ratio of 100% of market based pricing in the downtown Seattle market. In fact, six of the twenty-two available units sold prior to the auction, based on buyer demand.

The Lumen Auction represented an outstanding accomplishment and proved that the buyers at auction were serious homeowners. The Developer was extremely pleased with the event results that were produced and has reported to various media that “the auctioneer’s marketing program was flawless.”