Downtown Birmingham Condo Units to be Auctioned

Twenty unsold condos in downtown Birmingham's City Federal building will go on the auction block.

Gadsden-based National Auction Group Inc. plans to sell the condos to the highest bidder at an auction May 12. The tower's Atlanta-based owner and the auction company may agree to sell all 48 of the available condos if there is enough demand.

Even the penthouse, once listed for $1.85 million, could be sold at auction.

It is a move the developer and owner, Atlanta's Synergy Realty Services LLC, hopes will speed up sales in the high-profile condo project.

Synergy has sold 36 of the 84 condos since tackling a $20 million renovation of the 27-story former bank and office building, starting in 2005. The two- and three-bedroom units have been listed for sale from $239,000 to $935,000, depending on the size of the condo and what floor it is on.

Two condos in the building sold this month, said Randy Herron, principal with Synergy, a sign there still is interest in City Federal.

But the auction is designed to sell more condos at a faster pace, which is worth the risk of reduced sales prices, he said.

"This is not distressed auction selling, this is accelerated marketing," Herron said.

"We've had a lot of traffic over the past few months, even in a tough economy," he added. "A lot of people come in, look around, say they like it and they're interested but they want to wait a little bit. We decided we want everybody to know we want to sell some units now and they can set the price when they come to the auction."

Many slow-moving condo markets, including Atlanta, Charlotte and Memphis, have turned to auctions to move sales along.

Herron noticed the success of the Atlanta auctions and spent the past few months studying the idea for City Federal.

"At first I was concerned thinking about how it could turn out," Herron admitted, "but there is a lot of data on how auctions have gone in different markets."

William Bone, president of National Auction Group, said his company has sold units for a total of $87 million in condo auctions in Alabama and Florida since last May. He said property owners like the idea of moving several condos at one time, even if at discounted prices.

Bone said the auction will take place at the City Federal building and will include a party with food, music and drinks served by a bartender in a tuxedo.

He said would-be bidders can get more information on the auction and the bidding requirements at the company's Web site at www.national-auction.com.

Michael Calvert, president of Operation New Birmingham, said Birmingham has only 80 or so vacant condos, a figure that pales compared with the 6,000 or so available in Atlanta. He believes sales have slowed because of a "deflationary psychology" that's making would-be buyers scared to pull the trigger on major purchases out of fear prices will continue to drop.

"I think the owners of the City Federal see an opportunity to expedite sales and battle that deflationary psychology with an auction," he said.

From www.al.com / Birmingham News.