Barnard Marcus are set to become the next London auction house to venture into the New York property market. On April 28 the firm will link up with International Property Auctions for a sale of 50 residential lots at the City’s Marriott Hotel.
On offer will be a tranche of vacant and tenanted “co-op apartments” located in Queens, Brooklyn and Manhattan. New York co-ops are large, refurbished mansion buildings held as co-operatives or limited companies, with owners financing their mortgages through annual maintenance charges to the tenants.
“We thought we’d dip our toe in the water,” says BM’s Robin Cripp. “The American firm IPA are the main movers on this, but we’ll act as UK agents and monitor the response to investing in New York residential property on this side of the Atlantic.”
BM New York Inc were established last year to explore the possibilities for auction sales in New York, with this venture coming about through clients operating in London and New York. “The city’s residential market is very flat,” says Cripp, “but there is a feeling that the auction is a good way to get rid of residential property.”
On this occasion Robin Cripp will be content to sit and watch, but if the sale is a success he intends to conduct one in New York before the end of the year.
“If all goes well BM will be holding an auction in New York in the autumn,” confirms Cripp. “We will be looking mainly at mid- to low-range residential property — the market we know best.”
Cripp is hopeful that BM will avoid the difficulties which other English property auctioneers have encountered in the American market. “Other auctioneers have gone for bigger commercial lots — we are going to stay in the sector we know best and hopefully build on that.”
When in New York BM plan to do as New Yorkers do and conduct the auction along American lines. Prior to the sale, would-be bidders must place a deposit — called “earnest money” — to about 10% of the value of the average lot.
The deposit is refunded to unsuccessful bidders at the end of the sale. Lots are frequently offered from New York rostrums without reserve (for sale “absolute”), and BM will auction some lots on this basis.
