Jones Lang LaSalle and REDC Build Online Auction Platform
Jones Lang LaSalle (JLL) and Real Estate Disposition (REDC) will launch their joint online auction platform with the sale of a 100,000-square-foot commercial property in October. Responding to the growing need for liquated commercial property and real estate owned (REO) portfolios, Jones Lang LaSalle, a financial and professional services firm, paired its Value Recovery Services with REDC’s auction capabilities, according to a corporate release. REDC sold more than $5bn in real estate assets at auction since 2007 and $3.3bn in 2008 alone, said Jeff Frieden, CEO of REDC. The Value Recovery Service allows Jones Lang LaSalle’s clients to re-balance real estate portfolios and, with this new agreement, accelerates the process without upfront fees, said Jay Koster, president of Jones Lang LaSalle’s Capital Markets practice. Investors can auction notes with a variety of properties and debt instruments such as first liens, second mortgages, whole notes and sub-performing or non-performing mortgages, according to the corporate release. "With the default rate on commercial mortgages held by US banks expected to rise to the highest level in 17 years in the fourth quarter of 2009, the smaller regional banks will have less time and government intervention to delay and pray much longer. They need a solution to move loans and property easily off their balance sheets now," said Bart Steinfeld, managing director of Jones Lang LaSalle's Real Estate Investment Banking practice. Investors looking to pounce on distressed sales opportunities could expect more in the near future. A recent survey by PricewaterhouseCoopers reported that the looming debt of commercial banks and $153bn of commercial mortgage backed securities (CMBS) could ignite more buying opportunities by 2010. Write to Jon Prior.