CASE STUDIES AND WHITE PAPERS
Case Study – Industrial Building
Established Brokerage Company in Birmingham, Alabama has a listing of a Industrial Building formerly used as a food processing/baking facility. The building required some capital improvements for code violations and general repair. The building was on the market for well over a year with little buyer interest. The Brokerage Company partnered with BRAUN to Auction the building. BRAUN implemented a 60-day accelerated Marketing & Advertising campaign at no cost to the Broker. Buyers conducted their due diligence in advance of the auction, with typical property information (Phase One, inspection report, past appraisal) provided by Seller. Buyers were pre-qualified and were provided with a 45-day closing period with the opportunity to obtain financing, without this being a contingency of closing. BRAUN received over 251 inquiries which resulted in over 20 showings and 9 bidders. The building was auctioned in a live on site format in conjunction with proxy and telephonic bidding. The building sold for 12% above appraised value. The Seller paid zero commissions on the sale, the buyer paid the Broker, BRAUN and the Buyer’s Broker.
Case Study – Industrial Building
A Trustee of an Estate was tasked with closing a manufacturing company, selling the real estate, business assets of equipment and inventory of the manufacturing company. The Industrial building was never listed, and the business assets were valued at $2 million dollars. The building was appraised at $88 PSF. The BRAUN team proposed to sell all of the assets at auction. BRAUN’s Business Asset Group prepared the machinery and equipment for auction in conjunction with the preparation of the building. The auction of the building was conducted simultaneously with the auction of the Machinery & Inventory. A buyer provided an offer for the building prior to the auction day ( this buyer was sourced due to their interest in the equipment and inventory). At the request of the Trustee, BRAUN negotiated the terms of sale and a non-refundable deposit prior to auction day. BRAUN collected backup buyers on auction day with the right for continued bidding if the buyer did not close. The buyer closed and the building was sold for $108 PSF. The Machinery and Inventory was auctioned and the building closed in 43 days.
Case Study – Lender Non-Performing Note Auction
A Regional Bank has non-performing notes of a Gas Station and Hotel. The Lender does not want to take these assets in as OREO or appoint a Receiver, therefore determines the simplest format to sell the assets was via a note sale. BRAUN proposed an accelerated marketing and WorldBid Auction Program. BRAUN and the Bank collected relevant underwriting documents and prepared a Bidder Diligence Package. Each Bidder provided to BRAUN an executed confidentiality agreement prior to review. BRAUN marketed and advertised the notes via its accelerated marketing Program locally, regionally, nationally and internationally with a focus on India, Pakistan, Shanghai and Bejing. BRAUN’s Accelerated Marketing Campaign received over 16,000 web impressions. Pre-qualified Buyer’s bid via BRAUN’s Online WorldBid Auction Platform over a 45 day period with 63 bidders participating. Two buyers purchased the Note and funded in 14 days from the close of the auction. The lender achieved their goal of sale prior to the end of the second quarter.
Case Study – Baymont & Howard Johnson Hotel
A Regional Bank appoints a Receiver to manage two operating hotels. The Bank engages BRAUN to sell the hotels via BRAUN’s WorldBid Auction Program on behalf of the Receiver. BRAUN and the Receiver collect relevant financial information, Franchisor sale approvals and relevant property history diligence materials. Each Bidder provided to BRAUN an executed Confidentiality Agreement prior to review. BRAUN marketed and advertised the notes to buyers via its Accelerated Marketing Program locally, regionally, nationally and internationally. Buyers were provided 60 days to complete their diligence. Since the hotels were operating during the marketing campaign and BRAUN did not want to interfere with hotel operations, therefore, BRAUN used its Online, Proxy and Live Telephonic bidding platform for the prequalified bidders. The hotels were sold sequentially on the same day to maximize the Marketing Campaign and buyer interest. A key footnote regarding the sale of the second hotel and how well auctions create the “bidding frenzy,” because a buyer who was overbid on the first hotel auctioned, decided to bid on the second hotel knowing full well they never reviewed the financial information and inspected the hotel. They decided to bid nonetheless and subsequently overbid the other 4 bidders and WON! This buyer acknowledged to BRAUN after the auction that they were so disappointed because they did not win the first hotel, they were determined to buy the second, no matter that they conducted NO DILIGENCE of the second hotel. An astonishing and unbelievable fact. The lender achieved a sale of 79% of the note value on the first Hotel and 86% on the second hotel. The lender saved nearly $160,000 in operating costs by using BRAUN’s WorldBid Platform to sell the notes.