The Gavel Pit

October 01, 1990|By David Rosenthal









I'm bid-eight-and-a-half



and-now-nine." Auctioneer R. Andrew Stafford's words dance around the empty automobile showroom, once home to Inner Harbor Ford, and into the cavernous service department, where a silver time clock has stopped at 4:20.

At his side, acting as spotter, is Ray Nichols, president of Atlantic Auctions Inc. He watches for the oblique nod or wave that signals a new bid.

All the while, against the auctioneer's seamless backdrop of words, Mr. Nichols is involved in a private drama. With a smile, whispered words and a gentle nudge, he mines the crowd, trying to chip another bid from the blank gray wall of businessmen.

He wiggles his fingers in a little wave, as though he's trying to coax small children to follow him. During lulls in the bidding, he punctuates the auctioneer's patter with an abrupt cry: "HOW MUCH?" He points his black pen at potential bidders and raises his eyebrows in an unspoken question. And when a new bid slips out, he says, "Yes, yes, yes, yes."

The bidding moves along at a respectable pace, although never breaking into a run. The winning bid, from Harbor Hospital Center, which sits across the street, is $1.2 million.

That's no pot of gold. But it's a decent price for Ford Motor Credit, which is selling the property.

And after all, everyone -- buyer, seller, auctioneer, even the T-shirted gawkers -- knows that the real estate market ain't what it used to be.

Two days later, that message hits home, when the auction tableau is repeated outside the Merchants Club building in downtown Baltimore. Neither the auctioneer's chant nor Mr. Nichols' finger-pointing can elicit a single bid, and the marvelous old building goes unsold. Atlantic Auctions will get a flat fee for its services, but that fee is lower than the commission from a sale to an outside buyer.

It's a strange auction market these days.

While the fledgling recession hammers at retailers, real estate developers and other businesses, auctioneers are scrambling to pick up the pieces. Some companies are using auctions for a quick infusion of cash, a temporary pick-me-up to survive the numbing economic slowdown. Most often, though, an auction is the last nail in the corporate coffin, following a foreclosure or bankruptcy -- or both.

Whatever the reason, local auctioneers have plenty of properties to sell these days. Auction ads in The Sun have increased from about three pages to five pages per week. Recent auction ads have included a three-story office building on East Franklin Street, a former branch bank in Highlandtown and a 113-acre subdivision in Frederick.

"The banks are choking on real estate," says William Z. Fox, chairman of Michael Fox Auctioneers Inc.

But, as every auctioneer knows, few properties trigger a bidding frenzy these days. Since the beginning of the year, auctioneers say, the number of potential buyers has dwindled steadily.

The real estate slowdown has left developers with acres of surplus land.

Even the healthiest developers, aware of the problems of highfliers such as Donald Trump, are thinking twice about stretching their credit amid a softening economy.

Meanwhile, banks struggling to cope with bad loans have adopted tougher lending policies. Anyone interested in buying real estate or other property has a tough time finding financing -- especially for the multimillion-dollar projects beginning to appear on the auction blocks.

Mr. Fox, whose Baltimore-based company handles major industrial and real estate auctions throughout the nation, has watched these problems spread from the Southwest and Northeast. Only the Pacific Northwest region has remained immune so far, he says. "It's harder to sell property today -- any kind of property."

Jack Billig, another prominent, old-line Baltimore auctioneer, agrees. During the recessions of the mid-1970s and early 1980s, banks were much more willing to finance auction sales, he says. Today, unless a company is ready to use the property immediately, banks will hesitate.

"A purchaser who is not a user cannot get financing," Mr. Billig says. "It's created a market nobody can understand. . . . It's a frightening situation."

Such problems have forced Baltimore auction companies to hustle for business -- and look for sidelines. None has done it better than the 46-year-old Mr. Nichols.

Since leaving a cushy job at Maryland National Bank a decade ago, he has built Atlantic Auctions into one of the city's major auction companies.

Mr. Nichols' company has elbowed its way to the forefront, along with family-owned companies such as A. J. Billig & Co. and Alex Cooper Auctioneers Inc., which have been around for generations.

In 1981, Atlantic's two employees handled about 125 auction sales; this year, its 10 employees will handle about 1,000 sales.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.