There’s no doubt foreclosure activity in the commercial marketplace has slowed down, often times by following the “extend and pretend” rule. However, these recent examples give insight into how much lenders are willing to discount their loss at an auction.

This office building at 145 Park Lane, Moorpark, built in 2008, at one point was on the market for $5.8M. But the $2.5M loan ballooned up to a published minimum bid of $3.7M.

However, what we frequently see is that on the day of the auction, the lender will drop their minimum bid to a substantially lower opening bid to perhaps entice a 3rd party buyer . In this case, it was just over $2.5M but the property has now been listed by the bank at a (hoped for) $2.9M price point.

This 39,000 square foot office building, built in 1985, is just across the street from The Oaks shopping mall in Thousand Oaks. It had an assessed value in 2010 of $8.3M and a loan of $5.6M made in 2004 when the building was acquired.

The published minimum bid was $6.3M. But the “amount paid” on the Trustee Deed shows an amount of $4.1M, a number of just over $105 per square foot. You can’t buy the land and build an office building for that price today.

However, it requires exceptional patience to buy a property like this at auction because frequently the auction is delayed because of bankruptcy, or other negotiations taking place in the background. Also, not many investors on the day of an 11 AM auction can run to the bank and get that kind of money in a cashiers check (but an investor earlier this year did just that and bought the mini-storage facility at the corner of Eastman and Rose in Oxnard).

Finally, this very nice industrial building at 360 Cortez, Camarillo, had a published minimum bid of $1.2M but dropped the opening bid to just over $700k. It was listed and recently bought by an investment company at $710k.

If you are looking for commercial property as an investor or user, give me a call. I follow financially distressed commercial real estate in Ventura County.