Spotlight On: Lamar Fisher, CAI, AARE, President/CEO, Fisher Auction CompanyOctober 25th, 2011 by melissa
Spotlight on . . .Lamar Fisher
For this month’s Spotlight On, we spoke with Lamar Fisher, President and CEO of Fisher Auction Company. With 39 years in business, Fisher Auction Company has established itself as a prominent leader in the real estate auction field and offers valuable insight on the industry. In our interview, several topics were explored including the market for Southern commercial auctions, the influx of international buyers, and the 2012 real estate auction landscape.
PA: How would you describe Fisher Auction Company?
LF: I would describe Fisher Auction Company as a prominent leader in the accelerated auction marketing process, offering real property throughout the United States and the commonwealth of Puerto Rico.
PA: Can you elaborate on the accelerated marketing process?
LF: Since our conception 39 years ago, we selected not to sell property via the traditional, conventional method of sale. We chose strictly the accelerated marketing as a way to offer and sell real property. It condenses time frame – our program is a 90-day platform from time of contract with a client to the closing. I state ’90 days to pay day’ for our clients. We thrive on an intense marketing campaign for a particular asset(s), creating the urgency factor for an as-is, where-is, no contingency transaction.
PA: We see on your website that Fisher has been in business for 39 years – very impressive! Tell us about the auction cycles, specifically how this cycle is different from other ones.
LF: I have been engaged with Fisher Auction Company since 1980. Everyone witnessed the cycle in the late 80′s/early 90′s – the days of the Resolution Trust Corporation/Federal Deposit Insurance Corporation in which Fisher had the privilege of being 1 of 8 national auction firms to sell thousands of properties for those agencies across the country. We were selling 200 or 300 properties in any given initiative. But that cycle was different than today’s – the properties were different. It consisted of land parcels, subdivision lots and commercial improved properties, and not really a large residential component. This particular cycle that we’re facing today started as a major residential component to where the foreclosure of homes have been so massive. In my opinion, now you’re going to begin to see the second cycle, which is the commercial property side.
PA: What types of properties are doing well?
LF: If you can secure them to sell, multi-family properties are about as hot as you can get right now along with high-end, luxury waterfront multi-million dollar residential properties. You will also see some office product coming online soon, depending on the vacancy factors.
PA: Are there certain parts of the country where you’re seeing this?
LF: Actually no. I just got off the phone 5 minutes ago with one of our contacts in North Carolina who is also licensed in California, and he has a 30-million dollar cash investor looking for multi-family or high-end retail in specifically Los Angeles, San Diego and the Orange County area. So I think it’s across the country.
PA: We know that your firm concentrated primarily in the Bankruptcy Auction space years ago, but now it seems like you’ve expanded to other areas. Can you tell us about that?
LF: Because of the market change, the arena that we’ve been able to successfully expand into is the developer marketplace, and that’s been in the last 48 months including fractured condo transactions. Also, Receiverships are now becoming more widely utilized with the lending institutions, similar to bankruptcy work – where the institution is hiring a Receiver to be the mediator, manager of the asset(s) between the debtor and the bank. We’re continuing to be involved in trust/estate transactions and with the institutional sellers.
PA: How does your auction firm compare/compete with others that are part of a larger network with multiple offices?
LF: Fisher has a sterling reputation in the auction industry. We do a tremendous amount of referral work across the country. We really don’t compete with the Marknets and United Country firms. If we have an asset where we need additional assistance, I’ll reach out to our “Teaming Partners”. We have affiliations with Colliers International, Cushman & Wakefield and CBRE. In certain types of properties, we’ll bring them in and utilize their international network and expertise which benefits the process and the client. So I believe that’s how we can compete with larger networks.
PA: How important is local market expertise in your field?
LF: That speaks for itself. It is an extreme advantage to have local market expertise and will most likely secure the deal. It also depends on if you’re an expert in a particular type of property; i.e., fractured condos, commercial, industrial, etc. You gain national attention when you build a niche. An example is Fisher is probably the leading firm in selling fractured condos on a bulk basis. We’re driving national attention to these projects as well as others and attracting buyers from foreign countries to participate. We’re selling properties to buyers from Russia, Finland, the Netherlands, Singapore, Germany, South America, and Canada buyers are very strong in the marketplace due to their healthy economy. The Canadians have a lot of liquidity providing buying opportunities here in the United States, especially in Southwest Florida.
PA: What are your thoughts/predictions for 2012 in terms of auction volume? For example, which sectors will do best/worst?
LF: The general residential market is going to continue to struggle. I believe with investors; cash is king, so in my opinion, they’re going to continue to pay 20 – 30 percent below market value. As stated earlier, multi-family properties are going to escalate. Properties with a cap rate of 6 or better are going to do well. We feel 2012 is going to be similar to2010 and 2011. I don’t think it’s going to be any better as far as the economy is concerned, so I think auctions are going to continue to be a viable option for those who need our services.
PA: What are your thoughts on the popularity of auctions across the country? Is it different from state to state?
LF: Absolutely it varies from state to state. There’s no doubt about it. There are several states that are very auction-oriented, and there are other states that continue to struggle with it. Even in today’s world, auctions are still perceived to some as a last resort, and will continue to have this reputation for years to come. But what you’re seeing now is the luxury residential market, the wealthy of the wealthy marketing their properties via the auction process because they’re seeing the advantage of maximizing competition. Also we have found that buyers are comfortable with competing in an auction – they feel they are paying fair market value rather than trying to negotiate a transaction with a seller where they don’t know if they’re paying too much or not. So it’s a confidence builder.
PA: We are seeing a ton of luxury properties being sold via the auction method recently. In terms of marketing, does one go national or focus the marketing dollars locally in these types of auctions?
LF: We believe you need to expose the property on an international basis, especially with your high-end residential properties. We have an auction event in November for a luxury home on Star Island which is a very exclusive island on Miami Beach, home of many celebrities – the starting bid will be 10.5 million. We will have international buyers as well as national buyers competing on the day of auction. As I said before, you’re seeing a tremendous amount of international buying capital coming in with buyers from Russia and Canada, etc. – they’re at our auctions daily.
PA: How are commercial auctions doing in the Southeast? Do you see a rise in commercial development over the past year?
LF: We haven’t seen much development because of pricing levels the way they are.
Buyers can actually purchase an improved commercial/income producing property for less than it would cost to build. I think the wave of the future will be for the next 10 – 18 months, the banks are going to be forced to release these properties to the marketplace. But first you’re going to see the wave of commercial foreclosures. Banks have been holding back due to the regulations of the FDIC – they have been unable to proceed forward because of the regulations required of them to raise capital, so they’ve held off on foreclosing and have tried to work a plan with the borrower. But I’ve got to be honest, I think you’re going to see a flood of commercial foreclosures in the next 12 – 18 months, which is going to create more of a supply than demand – I think it will be very similar to the residential market, but they can’t hold on much longer. They’re going to have to go through the process and flush the inventory back on the market. Once they do that, then the market can correct itself. In my opinion, until they do that, we’re still in a false economy.
PA: Where do you see the market going with the high amount of condos out there, particularly in Southern Florida?
LF: The absorption of the supply has been healthy, where there aren’t as many units available as years past. What’s occurring is your investors are going directly to the institution and buying the remaining inventory and either putting in place a rental program or buying at such deep discounts that they’re going back to the marketplace at realistic pricing to move the inventory. So I think you’re going to continue to see a decrease in supply in South Florida.
PA: What are your top 2 or 3 tips for buyers and sellers?
LF: I think for the buyer, the main tip would be to conduct your due diligence in a very thorough manner, because auctions are usually an as-is where-is transaction. Make sure that you have the financial backing to close the transaction. On the seller side, if the seller is selecting an auction firm to handle their property(s) via the auction process, they also need to do their due diligence as well and thoroughly check out the track record of the firm, especially previous client references. One key factor for Fisher’s clients – we really service the client and keep them abreast at all times of the process so there are no surprises on auction day. Whether there might be 2 buyers or 200, you need to let your seller know what the market is telling you price-wise, and create realistic expectations.
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