Auction will sell real estate, mortgage notes

More than $1 billion of Nevada's distressed commercial real estate and delinquent mortgage notes will go up for auction in May, making it the largest commercial auction in U.S. history, an executive from the auction firm said.

The auction, scheduled for May 17-19, offers 55 retail, multifamily and industrial properties and land parcels located primarily in Las Vegas, with some in Henderson, Carson City, Sparks and Reno. It will be held live in Las Vegas and simultaneously online.

"In our opinion, the unprecedented volume of distressed real estate we are seeing here represents the bottom of the market for Nevada and in particular Las Vegas," said Jeff Frieden, chief executive officer of Irvine, Calif.-based Auction.com.

Financial and real estate analysts have predicted for years that commercial mortgage defaults would be the "next shoe to fall," with an estimated
$3.5 trillion of losses coming in the area of commercial real estate. That was back in early 2008.

"The quality and condition of these assets will compel even the most sophisticated of investors to take notice," Frieden said. "In any financial cycle, there is a best time to be active. For investors interested in Nevada, we believe that time is now."

Among the properties on the auction block:

■ A $56 million nonperforming note secured by 333,234-square-foot Sahara Pavilion North retail center on 29 acres.

■ A $50 million nonperforming note secured by The Fountains at Flamingo, a gated apartment complex with 524 units on 28 acres of land.

■ A $38 million nonperforming note secured by the 420-unit Montego Bay apartments in Henderson.

■ Nine additional notes of $20 million or more.

A complete list of properties and more information on the auction are available at Auction.com.

Frieden said the online auction platform works well for investors who want discretion and relative anonymity. It allows buyers an opportunity to purchase commercial properties or notes at very attractive discounts, he said.

John Tippins, a Las Vegas land broker and regional manager of ST Residential, said interest in the auction is a great signal for the market. It suggests that people with equity are looking for deals in Las Vegas, he said.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.