Last week’s auction of the remaining luxury Ocean Park condominiums was less than a stellar success, based on the number of units sold and the prices paid. Of the four units advertised for auction, only two sold – both for less than half the pre-auction list prices.
The penthouse unit, originally offered for $6.8 million and recently listed for $4.5 million, was withdrawn by the owners the day of the sale because a lack of buyer enthusiasm signaled a low price might be forthcoming if it was offered as planned in a non-reserve auction.
The properties were listed with Clark French and Cindy O’Dare, broker associates at Premier Estate Properties, and the auction was promoted and conducted by Concierge Auctions, the dominant luxury home auction company in the country dealing with non-distressed properties.
Originally slated to be on the auction block were the 6,600-square-foot penthouse with a dramatic tower that sits above the Citrus Grillhouse restaurant (unit 204); a 3,660-square-foot, two-story condo next to the penthouse on the park side that was listed for $2,050,000 (unit 203); and two three-story, 3,660-square-foot, direct oceanfront townhomes, one listed for $3,050,000, the other for $2,795,000 (units 105 and 108, respectively).
Expectations were high going into the event.
“We hired Concierge to handle the auction because of their track record in Vero Beach,” Steve Mulvey, president of Flamevine Partners, the group that developed Ocean Park and owns the remaining units, said in October. “Sales at Ocean Park have been slower than we expected, but this is not a distress auction. Our intentions are to sell the units at close to asking or above.”
French, too, had been cautiously optimistic. “Everybody who comes to something like this hopes they can steal the property they want, and we don’t discourage this, but I do think we will get awfully close to the list prices,” he said when the auction was announced.
“We are really good at activating buyers who are excited by the opportunities of an auction like this,” said Laura Brady, president of Concierge. “Many will be people who are coming to Vero for the first time, buyers looking for a certain lifestyle who are not confined to any one area.”
In the end, there were 10 registered bidders who put down large cash deposits to participate, with seven present at the auction, according to Brady.
The auction was scheduled for 6 p.m. on Thursday, Nov. 12, and was held in the penthouse salon, an impressive circular room in the tower that will serve the eventual residents as a living room or dining room.
With the penthouse off the table, there were two rounds of bidding, according to Brady. The first round was a no-reserve bidder’s choice with the two oceanfront units (105 and 108) up for grabs. The high bid was $1,350,000, according to French, and the high bidder chose No. 105, which had been listed for $3,050,000.
The next round was a no-reserve auction for No. 203, the park side condo listed for $2,050,000. The winning bid was $975,000.
If all the units had sold at asking, it would have netted Flamevine Partners a little more than $12.3 million, almost as much as the combined amount paid for the other eight units in the 12-unit development, which were sold between 2012 and early 2015. As it was, the owners netted a bit more than $2.3 million from the auction. French said the other oceanfront unit, No. 108, went under contract over the weekend after the auction for more than $1,350,000.
Most island real estate professionals interviewed for this article said the asking prices were inflated, so the sizable deviation from those numbers may not be an totally fair measure of the auction’s success, but the high bids were also well below prices paid for comparable units.
Before the condos were listed with Premier in the run-up to the auction, they were listed with Dale Sorensen Real Estate and the company sold the first three oceanfront condos for prices ranging between $2,175,000 and $2,500,000. Two of those sales were in 2012 when the market was still in the doldrums after the real estate crash that began in 2007.
Sorensen reportedly brought offers in excess of $2 million for the last two oceanfronts, units 105 and 108, that Flamevine Partners turned down, presumably believing the units were worth more in a period of market recovery.
Overall, Sorensen sold eight condominiums in the project, handling 14 of 16 transaction sides, during a time when very few comparable luxury condos were selling on the island.
Alex MacWilliam, Inc. and Norris & Company each brought one buyer.
Sorenson also brought one of the buyers on auction night. Premier brought the other.
Ocean Park is a masterpiece project that transformed the south end of Ocean Drive when it was built and will long benefit the beachside community as a signature property and enviable place of residence.
The developers contributed $1 million to upgrade Humiston Park, which adjoins the project, and the building itself is a strikingly handsome piece of architecture.
Excellent as the project is, however, the developers’ timing could not have been worse. The partners bought the 1.1 acre site in 2006 and tore down the old Crusty’s restaurant and other hurricane-damaged buildings. By the time they had luxury homes packed with the finest high-end finishes ready for market in 2010, the real estate downturn had taken a grip on the island home market.
In that context, French pointed out a positive outcome of the auction and its aftermath.
“Our mandate from the owners was to close the project out this month, by a date certain, and we are three-quarters of the way there with the three sales. We are continuing to talk to a number of buyers interested in the penthouse.”
