Will Online Property Auctions Become a Hit?

eBay for Commercial Real Estate? ... Although property auctions are frequently used to sell real estate outside the U.S., the auction format has never really caught on here -- except for distress properties. Will the Internet change that? Several firms are trying to use the Internet to promote the sale of properties using an auction or date-certain format. For example, Colliers has partnered with Bid4Assets to offer its Telecom Property & Equipment Auction. You can browse complete offering documents and actually bid for the equipment online. Matt Cantor of Colliers Global Telecommunications Group says that Colliers has also called 2, 500 prospects and sent 5,000 direct mail pieces and 28,000 e-mails. Sealed bidding for the 35 properties (34 leaseholds, 1 owned) begins on December 3 and ends on December 14.

Jones Lang LaSalle's Capital Markets Group frequently advertises properties offered by its Property Watch service in the Wednesday Wall Street Journal real estate section. When I visited the site recently, about 50 properties were offered, both income producing and vacant. Some had bid deadlines. Some did not. While the public can access very rough information, you must register to receive a login and password for more details. After you register, you can create your own Watchlist and request a complete package sent by mail.

SurplusRealEstate.com is a site created by Expert Real Estate Advisors to offer properties, some of which, according to a pop-up window, are in bankruptcy proceedings. Although the web site shows logos of Grubb & Ellis, CB Richard Ellis, Colliers, Staubach, NAI and Coldwell Banker Commercial, which are described as "frequent" local partners, there are no names and no bios on the principals. So the site is a bit of a mystery.

All three of these services support traditional brokerage services with the web simply serving as a relatively inexpensive broadcast and information-delivery vehicle. My bet is that online auctions will continue to play only a fringe role in the sale of real estate in the future. What do you think?

--Peter Pike