International Buyers Fill Auction Space

Editorial|&utm_term=|Website-Editorial-NAT(Website)|"> Auction.com's EVP and new general manager for commercial real estate Gordon Smith tells GlobeSt.com. As we reported last month, the firm tapped its Smith to be general manager of the company's commercial real estate division. Smith also currently heads Auction Finance, the division that facilitates financing for commercial and residential real estate investors. We spoke with him about his dual role at the firm and the latest developments in the online real estate auction space.

GlobeSt.com: What are your goals in your new role at Auction.com?

Smith: Obviously, things had been running incredibly smoothly when I took over the role. The company was firing on all cylinders. My goal is to continue the momentum the company has in the CRE space. First is to expand our footprint in terms of seller clients in the US and also to continue to use technology to create a more seamless process for our clients, which we're doing every day. We're working on a diligence process that should make buying and selling on our platform a lot easier, and we're starting to see a wider audience of buyers. There's been a clear emergence of international buyers on our platforms, and we're continuing to expand on that—it's an initiative. We're also trying to continue our partnership with the brokerage community and make it easier for them to use our platform. Those are the four or five big-picture objectives. I really do believe that real estate is moving online. It's made great strides, and I only see positive things going forward.

GlobeSt.com: What distinguishes this division from the purpose of other divisions at Auction.com?

Smith: We really have two primary divisions: residential and commercial. Residential is very focused on both the investor buyer and the retail buyer, and we are solely focused on the commercial real estate investor buyer/seller. The finance business has been rolled up under the commercial business unit.

GlobeSt.com: What is the most surprising thing you see happening with commercial real estate auctions?

Smith: The most surprising evolution is the emergence of this global customer. Given the marketing reach we have and obviously the marketing and investment dollars we make, we think in some cases 50% of our buyers don't even know who the listing agent is. That's not meant to be a negative thing, but instead of the buyer being from the local neighborhood, he's often from out of state or out of the country. As people start to see the breadth and depth of what sellers get on our platform, it's surprising even to our brokerage partners. They're surprised at where these buyers are coming from. Brokers are able to reach a huge community, but it's usually local, and we're able to go much farther than that geographically. The combination of our global experience and their local reach is pretty powerful for them and for sellers. We're seeing European investors, Middle Eastern investors, Chinese investors—we're really seeing it from all over.

GlobeSt.com: Where do you see untapped opportunity for acquisitions in this industry?

Smith: Most of the product types are pretty well covered. In any market where there's a lack of volatility, where rates are low and have been for a long time, you will see increasing demand for assets. Untapped opportunities generally mean you're probably going to be taking some more risk. We're starting to see more development, but that's not really relevant to our business.