Cannery Loft condos go up for auction in November
Tuesday, October 06, 2009 4:38 PM (pst)
Twenty-nine Cannery Loft condos on the Astoria waterfront are up for
auction Nov. 1. This photo was taken prior to construction of a second
condo building.
by Joanne Rideout
CRBJ staff reporter
Homebuyers in search of a low cost condo may find it on the Astoria waterfront in early November.
Cannery Lofts condos at Pier 39 on the east end of town will offer 29 condo units for quick sale at an auction in Portland next month.
"We have a starting bid that allows buyers to determine the price," said Rhett Winchell, president of Kennedy Wilson, the Beverly Hills-based auction firm that is handling the sales. "We hope to sell out the standing inventory in one day."
The auction will take place at the Sheraton Portland Airport Hotel at 1 p.m. on Nov. 1, and will last approximately one hour. Some bids start at $90,000. A few condos for sale in the same complex are priced at around $479,000.
Participants must register to attend and bid on auction day, and provide a cashier's check for $2,500, among other requirements.
Winchell said auctions are a way for companies that build condos to recoup costs in a down market.
"Most are selling a couple of units a month," he said, referring to a slow nationwide condo market. "They have associated costs with construction loans, taxes, and other carrying costs. It can amount to 15 or 20 percent a year."
Winchell said as far as he knows, Cannery Lofts builder Urban Pacific Group is not in receivership, because Kennedy Wilson is dealing directly with the seller in the auction, and not with a receiver - as would be more typical in a foreclosure situation.
Urban Pacific Group’s Chairman and CEO Scott K. Choppin did not return Coast River Business Journal’s phone calls, and calls to the local Cannery Lofts condo office went unanswered.
According to Winchell, private individuals who already own units in the condos and are seeking to sell them at competitive prices may benefit in the aftermath of an auction, because in many cases auctions sell off all available properties in a condo complex during the course of an hour, removing discounted properties from the market.
But that's not necessarily the outcome, said Portland-based real estate appraiser James Dowley, who does work throughout the Columbia-Pacific region.
Dowley said the relatively large number of condos for sale in the Cannery Lofts auction creates a unique competitive situation that can redefine the local condo market. He said recent condo auctions in Seaside and Nehalem have resulted in quick sales at well below what were once considered market prices.
"When someone is just dumping properties on the market, with willing buyers and sellers competing against one another, it's this really fresh market," he said.
Dowley said the overall problem is too much condo inventory, leaving owners and builders with units they can't sell easily.
"Developers thought this was a good idea," he said. "It's crushing if you own it, because you built this building on the premise that it would sell in 18 months. You're looking at your business plan and the whole thing went cobbywobbles on you. It puts pressure on the developer, who says, 'these have got to go.'"
Dowley said it's debatable whether the Cannery Lofts auction will affect other condo sales in Astoria.
"On the one hand, it's going to soak up potential buyers, and you are also setting the mental attitude that condos are worth $90,000," he said of the auction's starting bid. "But there are other condos that won't be affected at all. Others will say [of the Cannery Lofts units], 'those have absolutely no interest for me at all.'"
He said condo buyers who are planning to live in the units are sometimes more likely to buy at an auction, because those buying for investment purposes may be limited in their options for resale.