Good Morning Naples Friends,
So many of you reached out about Trieste #306. Here is the history, results, questions and conversations to fill you in.
Trieste at Bay Colony #306 was advertised as a “No Reserve Auction” earlier this year. The words, “No Reserve Auction” tends to perk up some ears because “no reserve” means there will be no starting the price at an unreasonably high number so a buyer “could” have a real shot at getting a tremendous deal.
History on Trieste at Bay Colony #306
Trieste #306 went on the market in December 2015 for $2,295,000
Dropped to #2,095,000 in January 2017
Went off the market for about 3 months during the summer of 2017
Hit the market again in October 2017 for $1,995,000
Went off the market in June 2018.
Re-entered the market October 2018 for $1,995,000
Dropped to $1,795,000 in January 2019 to $1,795,000
When Trieste #306 started advertising as “no reserve auction” the auction was to be held on June 9th.
The auction date didn’t occur on June 9th but changed to July 9th.
Many called me to ask what it sold for only to find it wasn’t auctioned. Some asked why? It is my experience the biggest reason auctions aren’t held on the advertised date because they did not garner enough attention to expect a favorable turnout.
Some people I spoke with questioned if it would sell for less than $1,000,000 and expected it to sell for $1,200,000 or $1,300,000. I expected it to sell for $1,600,000.
It sold for $1,585,000.
Trieste at Bay Colony – The Beginning
Trieste at Bay Colony received their certificate of occupancy in 2002. Not a great year considering the US was still reeling from the effects of 9/11. It hit Naples particularly hard considering many folks were concerned with the economy and their safety. Second-home purchases were clearly not at the forefront of everybody’s mind.
When Trieste at Bay Colony launched, units came with kitchens and bathrooms but the rest of the unit was decorator ready. Units were delivered with no floors, no paint just kitchen and bathroom cabinets, countertops and an appliance package. Original owners were tasked to finish out units to their personal tastes and budgets.
#306 sold in 2002 for $1,650,000 in August 2002.
Trieste at Bay Colony – Middle Years
Despite the elaborate building amenities and finishes made to the interior, Trieste had a terrible time closing out. Sure, Naples, Florida experienced the mass run-up of the peak of the real estate trend between 2004-2006. I remember seeing TON of inventory available in Trieste through those years always showing an oversupply of inventory but the building managed to do well during those years.
2004 12 units sold $1,385,000 – $5,500,000.
2005 16 units sold $1,460,000 – $3,275,000.
2006 14 units sold $1,565,000 – $3,050,000.
2007 9 units sold $1,700,000 – $2,785,000.
2008 6 units sold $2,075,000 – $2,917,500
It wasn’t until 2014 before more than 5 units sold per year on the open market with 2014 marking the most any Trieste units sold since 2005 with sales prices starting at $1,815,000 to $3,550,000. Briefly, there was a short period of time when finally nothing in Trieste was available.
In 2016 I sold the most expensive unit in the building at $6,150,000 but my client got a terrific deal considering there are 5 other units that paid more per foot. The highest-priced unit to sell closed for $1,009/foot.
Trieste at Bay Colony – This Year
5 units have sold this year with the newest price per foot record closing at $1,009/foot. Trieste also broke another record with #306 marking the 3rd lowest price per foot sale since 2011 selling at $388/foot.
How Did The Seller Do?
If getting the condo off their books was the goal, their mission was accomplished and we should all consider it a win.
If selling at the 3rd lowest price any unit in Trieste has ever closed on the open market in the history of Trieste was a goal, they accomplished that too!
Ultimately, they paid $1,650,000 plus cost to finish the unit, let’s say a minimum of $250,000 (wildly conservative). They lost $350,000.
How Did The Buyer Do?
They purchased the 3rd lowest priced unit Trieste has ever seen on the open market. Large chances are the new owner will want to renovate. If they renovate the same way most Bay Colony residents renovate, it will cost in excess of $500,000 on a good day. Then they’ll need to furnish it. According to Rob and Stucky, designers want $45.00/foot to do it in a way that will cause a home to sell. That’s another $183,375.
So we’re $700,000 on top of $1,585,000 = $2,285,000 with no view located on a busy road where traffic is likely to increase due to One Naples making its way through planning and zoning as we speak and the Ritz Carlton working on plans for a new high-rise which will also affect traffic noise for Trieste at Bay Colony 6th stack residents.
Consider Trieste at Bay Colony is now 17 years old. Is it possible the residents have been putting reserves aside to remodel at least the soft interiors of this building? Sure. Is it probable? Maybe not. This could cost residents in the form of a special assessment when and if a vote passes to improve the aesthetic value of the common areas.
A Few Points To Mention:
I was particularly alarmed at the many strict signs located within the unit stating NO PHOTOGRAPHS ALLOWED. There were several people who went through this unit to assist friends and family members interested in the property who weren’t in town. They did not want photographs taken of the view which was primarily of the public parking garage located directly in front of this unit. How is that consumer protection?
Their terms and conditions of the auction contract and rules were in my opinion, really crazy! There was a 10% “buyer premium” paid to the auction house paid by the winning bidder. If the winning bidder made the first bid, they saved 5% but if not, they would’ve been required to pay the amount they bid plus 10%. That would’ve been an additional $158,500 if the sales price would’ve ended up being the winning bid price.
The property would’ve been sold as-is and Buyers were encouraged to personally inspect the property but there was no inspection contingency so you had no recourse of inspection issues “known” or “unknown”. What about mold and radon, the two costliest inspection issues that arise that virtually nobody could identify with a visual inspection?
I don’t think auctioning luxury properties in Naples is good for buyers or sellers. This unit didn’t sell at auction but I imagine, the seller was required to pay the auction company something even though it never made it to the auction. Had they gone the traditional route and listened to their real estate agent and responded to market conditions, they could’ve sold incredibly faster and likely made more instead of chasing the market down.
I don’t think luxury auctions are particularly good for buyers either. The auction contract is incredibly one-sided with enormous additional fees and no property condition protection.
If you’re thinking about buying a Naples luxury property in Bay Colony or elsewhere, hire a buyer’s agent who will protect your best interest, inform you of all your rights and will tell you if you may be making a mistake. Call me for incredible responsiveness, vast negotiating skills and intelligent market knowledge.
If you’re thinking about selling a Naples luxury property in Bay Colony or elsewhere, hire a selling agent who will protect your best interest and inform you of all your rights and will tell you precisely what you need to do to make the most. Call me for precise market intelligence, vast negotiating skills and incredible marketing solutions.
Shannon Lefevre, PA