Rowan Lofts Ready to Show Off New Tech for February Auction
Caltech professor Dr. Charles Plott demonstrates the Intellimarket auction system to media on Friday.
DOWNTOWN LOS ANGELES — When the Rowan Lofts holds its 79-unit auction on February 8th, it'll be a far-cry from the fast-talking affair typically associated with the bidding process. Instead of fast-paced raises, a new simultaneous auction format will offer buyers a chance to survey offers across the board and weigh price points on multiple units.
The 206-unit Rowan is a high-profile conversion located in the Historic Core. The auction, scheduled for February 8, is a attempt to satisfy lenders by getting half the units into contract.
On Friday, the project invited media in to get a preview of the auction technology provided by Intelligent Market Systems. Company co-founder Bill Stevenson (who is also a partner in developer Downtown Properties) explained that the idea for a simultaneous auction system came out of the frustration that he saw buyers experience in real-estate auctions. A bidder might like two or three different units, but because each were auctioned in order, would be unable to choose between them. "No matter what sequence we put the homes in, bidders had a big problem," Stevenson said.
Stevenson partnered with Caltech professor Dr. Charles Plott to form the auction company, building off Plott's studies in the area. In 1995, an early version of the Intellimarket system was used to auction off $7.7 billion in airwaves for the FCC.
The big difference in the Intellimarket system is that all items for auction operate on a single clock. Any bid adds time to the entire auction, allowing buyers time to consider further bids. As the price on one unit rises, a buyer might switch his attention to another with a better value proposition.
Stevenson expects that buyers will make full use of this ability on the Rowan sale, coming into auction day with several units they are interested in. "I think there will be virtually no bidders who don't have multiple options," he said.
The Rowan auction will be the most units the Intellimarket system has been used to sell off. The firm expects the Sunday auction to take approximately two and a half hours.
The project comes to auction after experiencing a steep decline in presales, something Stevenson attributed to both market conditions and delays in getting the building ready for sale. Where the Rowan once had 120 presales, that number has now dropped to approximately 30. To successfully auction most of the 79 units up for bid, the developer hopes to get at least 150 bidders pre-qualified.
The auction will take place on Sunday, February 8, at the Rowan Lofts. Minimum bids start at $195,000. Those interested in bidding can visit the project's sales center at 460 S. Spring or visit the auction website.