Madison Avenue Condos Hit the Auction Block


FOR all the recent price cuts and rental conversions in the turbulent New York condominium market, developers rarely resort to auctioning off unsold units.

But one developer, Cardinal Real Estate Investments, a property fund, will take the plunge in June when it holds a one-day auction for the six remaining units in its nine-apartment building at 127 Madison Avenue, called m127.

“There’s going to be some discount for this transpiring in an auction format,” said Kyle A. Ransford, a founder of Cardinal Investments. “But the upside for us is that it happens quickly.”

Jonathan J. Miller, the president of the Miller Samuel appraisal firm and a partner at Condominium Recovery, which invests in real estate, said that speed was exactly what an auction was about. “It compresses marketing time into a one- or two-day window,” he said.

Apartments at m127 were first listed in 2007. In 2008 the housing market sputtered. Cardinal offered six remaining apartments as furnished rentals.

After having carried the building for several years, Mr. Ransford said, he and his partners just want to move on to other investments. “We’re not going to slip into foreclosure during the course of the auction,” he said, “but that’s certainly a possibility in the long term.”

Cardinal has hired Paramount Realty USA to organize the event. It will hold open houses, starting on Memorial Day Weekend, then auction off all the apartments on June 27 at the Roosevelt Hotel on East 45th Street.

There is no minimum bid for the two-bedroom units, some of which have been listed for as much as $1.9 million, but there is a “suggested opening bid” of $599,000.

Nor does the penthouse, once asking $3.4 million, have a minimum price, though the developer may not sell it if bids come in too low.
But what if no one shows up?

“This is an absolute auction for luxury condos on Madison Avenue,” said Misha Haghani, a principal at Paramount Realty. “I don’t think that’s happening.”