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Vacant downtown building heading to auction

CHARLESTON, W.Va. -- After more than a year on the market, realtors now plan to sell West Virginia Housing Development Fund's vacant four-story former headquarters building along Virginia Street at auction Aug. 1.

 The fund's board of directors voted last April to sell the 109-year-old building at 814 Virginia St. East. The Housing Development Fund has been operating out of new headquarters in Kanawha City since August 2011.

The board hired Charleston commercial real estate firm Goldman Associates Inc. to sell the 31,680-square-foot building. The building was put on the market with an asking price of $1.1 million, which was based on a 2010 appraisal of the property value.

Goldman Associates president Jay Goldman said the property initially attracted some interest, but that eventually evaporated.

Now the board has decided to take a new marketing strategy and put the building up for auction.

Goldman said that while the board was content to use the traditional selling practice of listing the property on the market at first, they are now more interested in getting the property off of their balance sheet.

"They've looked at its book value and their objective is to eliminate the holding costs, which would include insurance, upkeep and maintenance on the elevator and stuff like that," Goldman said.

The Housing Development Fund purchased the property for around $1 million in the early 1980s. While the building was more than a century old, it had been modernized in the 1970s.

When Goldman Associates first bid to become realtor for the property, they noted some upgrades were needed.

Those included replacing the current 40-year-old heating and cooling system, upgrading the electrical system and replacing the building's elevator. The firm estimated a buyer would need to invest $800,000 to $1 million to renovate and modernize the building.

However, officials said those potential repairs were factored in to the original $1.1 million appraisal price of the building.

Even though it needs some upgrades to its systems, Goldman said the building is in good condition for potential buyers.

"It's got restrooms on each floor, kitchenettes, dumb waiter. . . a reception area where you could place a secretary," he said. "It's a very nice building."

He also noted the building has a fully operational sprinkler system and is furnished in many areas. Those furnishings will be included with the sale of the building, he said.

"I think somebody's going to have a great opportunity with this building in almost move-in condition with all the furnishings," Goldman said.

Goldman also said people shouldn't confuse this building's auction with other things like fire sales or foreclosure auctions.

He said he's been conducting commercial property auctions for nearly 40 years and said the method has proved successful for selling commercial and state properties at good prices.

"It's a legitimate method of marketing," Goldman said. "These are cases where businesses make a legitimate business decision, they want to sell and they want to sell it by a certain date — and that's what (the Housing Development Fund) is doing."

Goldman said one of the drawbacks of selling commercial properties by traditional means is that prospective buyers will often believe that if they wait for the property to sit on the market for a long time, the asking price will come down.

Putting the property up for auction essentially sets a deadline for interested buyers.

"If they want to buy it, they've got to buy it that day — that's the key," Goldman said. "If the property is properly marketed with the auction method of marketing, it can be successful."

The board set a minimum bid of $485,000 for the Aug. 1 auction, which will take place inside the building beginning at 11:05 a.m. Goldman Associates will collect a 5 percent buyers premium off the winning bid as compensation for the sale.

Goldman said he believes the Housing Development Fund will get more than the asking price for the building when it goes to auction.

He said since the advertisement ran last week listing the auction, he has already given tours to two potential bidders. He expects to garner more interest when the firm puts the complete bid package on its website, www.goldmanassociates.org, this morning.

Contact writer Jared Hunt at business@dailymail.com or 304-348-4836.


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