The sellers hope to fetch somewhere between the market average of $80 and a high of $200 per square foot.
The auction will be the first of its kind in downtown Colorado Springs’ recent history. Schur Success Realty & Auctions Co. auctioneer Larry Deaton will conduct the on-site event.
It is the second building on the 100 block of North Tejon to be listed for sale in the past 30 days. The Bryan & Scott store at 112 N. Tejon is on the market for $1.8 million.
Deaton said auctions aren’t designed to get rid of something quick — they’re simply a marketing tool.
“But I think it (the auction) will create plenty of buzz because of the building’s location and its history,” he said, adding several open houses will be staged prior to sale.
Deaton said interested bidders must register online and bring a driver’s license and a cashier’s check for $10,000.
The property is being sold with a reserve. That means bids will be subject to the acceptance of the seller and will additionally include a 10 percent buyer’s premium to determine the total purchase price.
Located in the middle of downtown Colorado Springs, the building sits on slightly less than an acre of land.
“I think the buyer will probably be an owner-user,” NAI Highland Commercial Group broker Jim Spittler said.
He expressed some doubts about trying to sell the property with a reserve.
“Generally we’ve found properties sell better if it’s an absolute rather than a reserve sale — and improved property is more likely to sell than vacant land,” he said.
Typically more people turn out for absolute auction because in those instances the property must be sold at any price.
And that’s because perception is that they’ll sell cheaply. Reality is, however, that if enough bidders are interested, buildings typically sell for what would be a reserve price or better.
“The outcome will be very interesting. I think it has a decent shot at selling, depending on the reserve price. The owner’s had some level of interest, but it wasn’t enough,” Spittler said.
In addition, if Michelle’s sells, other commercial owners who have considered auctions may decide to move ahead as well.
Whether the buyer is a retailer or a restaurant operator, they’ll inherit a building with a rich past.
In better days the prime retail structure was the site of a highly successful candy and ice cream cafe owned by the Michopolous family of Colorado Springs. The business’ famous homemade ribbon candy was featured on The Food Network and the popular eatery graced the cover of Life magazine in the late 1950s.
The current owner, Absolute Equity Purchasers Inc., bought the vintage property built in 1909 as a foreclosure for an undisclosed price in 2007. The building has remained vacant since.
Oct. 8 promises to be a busy day for the auctioneer as the company will also conduct the auction on a 60-acre residence and horse property with a 12,000-square-foot indoor arena in Elbert, Colo., that afternoon.
Commercial real estate auctions have not been as common as residential real estate auctions in Colorado Springs.
Deaton hopes the Michelle’s auction will fare better than its residential counterparts.
While two previous Front Range auctions have featured more than 40 Pikes Peak region residential properties, these efforts since the first of the year have not netted great results.
In fact, a Denver auction in the spring featuring 33 local ReMax Properties Inc. listings resulted in the sale of only three local listings. A second auction of 11 homes owned by Classic Homes garnered the same result. In both cases, the homes that sold went under contract prior to auction.
In related news, a $4.4 million home built by Classic Homes and featured in the 2009 Parade of Homes has sold to buyers Bjorg and Jarle Sky for $2.3 million.
The 5,375-square-foot residence sits on 2.66 acres and was included in a Sheldon Good & Co. auction this spring but hadn’t sold.
The Skys got a bargain: The home’s 2009 assessed value was more than $3.5 million.
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