comprehensive
real estate & business
asset disposition services
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Services: Auctions

Auction Services


Key auctions all types of commercial and industrial assets, including real estate, plant and equipment,
vehicles, inventory, and intellectual property.

We employ state-of-art auction technology and have extensive experience with every type of auction method, including live, simultaneous-live-online, sealed bid, reverse, multi-parcel, and internet-only auctions. We can help determine the right auction for you.

We conduct auctions at the seller’s place of business or at our 7-acre facility near Interstate 465 in Indianapolis. We have ample space to store assets, including several climate-controlled warehouses.

When the seller prefers the speed or security of a guaranteed cash purchase, we purchase the assets and conduct our own auction.

We approach every auction with the same winning formula: careful planning, meticulous setup and preparation, multi-faceted marketing, rigorous auction-day management, and thorough post-auction removal and closeout.

Auction Expertise


Key is expert at auctioning a wide variety of assets, including:

  • Commercial / Industrial Real Estate
  • Residential Real Estate
  • Industrial Machinery
  • Commercial Equipment
  • Heavy Equipment
  • Vehicles
  • Intellectual Property
  • Warehouse Equipment
  • Technology Assets
  • Furniture & Furnishings
  • Collectibles
  • Restaurant & Food Service Equipment
  • Wholesale Inventories
  • Retail Fixtures

Clients Served


Key serves a diverse client mix. We understand the needs of and regularly serve:

  • Small Business Owners
  • Financial Institutions
  • Asset Based Lenders
  • Leasing Companies
  • Bankruptcy Trustees
  • Chapter 11 Debtors
  • Receivers
  • Assignees
  • Fortune 500 Companies
  • Government Agencies
  • Large Estates
  • Private Investors

 

Some of our recent clients include:

  • Ace Hardware
  • ATA Airlines
  • Downton & West
  • Farmers Bank
  • Firestone
  • Fifth Third Bank
  • First Merchants Bank
  • German American Bank
  • Huntington Bank
  • Indianapolis Airport Authority
  • Indiana Securities Division
  • International Aerospace Tubing
  • JP Morgan Chase Bank
  • MainSource Bank
  • M&I Bank
  • National Bank of Indianapolis
  • Old National Bank
  • Panther Racing
  • PNC Bank
  • Pratt & Whitney

Types of Auctions


There are generally two types of non-internet auctions: live auctions and sealed bid auctions.

Live auctions are most commonly associated with auctions. An auctioneer calls for bids in a public forum until the highest bidder prevails. Live auctions also sometimes include a live online auction that is conducted simultaneously with the live auction. Typically the online bidder listens to a live online broadcast of the auction, and bids by clicking his mouse. An auction employee monitors a computer and advises the auctioneer each time an online bid is received.

Live auctions typically are used in the following situations:

  • The owner wants to sell the property on predetermined terms, usually on an as-is basis with no contingencies.
  • There are many potential buyers and the competitive bidding process most likely will yield a fair-market price or even a premium in the case of a highly desirable property.
  • The property does not require lengthy evaluation to determine its value.

On the other hand, sealed-bid auctions are preferable for situations that combine the following characteristics:

  • One bidder is superior to all others.
  • A great disparity exists between the highest bidder’s offer and second-highest bidder’s offer.
  • Deal flexibility adds value to the transaction.
  • Alternative bids are desirable.
  • Price is not the sole consideration for accepting a bid (such as a case where the second-highest bidder has more desirable credit than the highest bidder).

Absolute vs. Reserve

Live auctions and sealed bid auctions come in two basic flavors: absolute auctions and non-absolute auctions.

In an absolute auction, the property is sold to the highest bidder regardless of the price. Since a sale is guaranteed, absolute auctions tend to generate the highest buyer excitement and participation, and hence the highest returns. However, the seller bears the risk that the winning price will be below his or her minimum expected price. Many sellers, including financial institutions and government agencies, increasingly use the absolute auction method.

In a non-absolute auction, the seller is not necessarily bound to accept the winning bid. Non-absolute auctions include several variations, including the minimum bid auction, the reserve auction, and the seller approval auction.

In a minimum bid auction, the seller publishes his or her minimum acceptable bid in advance of the auction. The auctioneer may only accept bids at or above the published minimum price. This eliminates the risk that the seller will be forced to sell at a price he or she deems unacceptable, but it also tends to limit interest in the auction. It is critical that the seller set the minimum bid price low enough to act as an inducement rather than a hindrance to a successful auction.

In a reserve auction, the high bid is essentially transformed into an offer, rather than a sale. The seller pre-determines the price at which the property will be sold, and is not obligated to accept the price (or “confirm a sale”) unless the price reaches the seller’s reserve price.

The seller may or may not publish the reserve price. In an unstated reserve, the seller’s minimum acceptable price is not made public. This method is generally used when the owner’s price expectation involves a range of values. If the bidding is in the range, the owner generally accepts the bid. In a stated reserve, the seller publishes the reserve price in advance of the auciton. This approach differs from the minimum bid approach in that a stated reserve informs the public where the owner expects to end, rather than start the bidding.

The main disadvantage of reserve auctions is that some prospective buyers are turned off by them, and decline to participate in them. They say they do not want to risk the time or expense in researching the property and attending the auction, only to find out their high bid is unacceptable to the seller.

Another variation of a reserve auction is the seller approval auction. This is frequently used for real estate auctions. In a seller approval auction, no pre-determined reserve is set by the seller. Instead, the auctioneer conducts the auction, “holds” the highest bid, and then the seller is given a set time after the auction (typically three days) to accept or reject the offer. If the high bid is accepted by the seller, the sale proceeds to closing; if not, the bidder’s earnest money deposit is returned, and no sale takes place.

Cash Purchase


Another liquidation alternative for inventory, equipment, or real estate is a Cash Purchase, so named because the auctioneer actually purchases the assets before the auction takes place. Key has purchased everything from single pieces of equipment to entire plants. In return for the upfront sale, Key typically requires that the seller agree to allow Key cost-free use of the seller’s premises for approximately 60 to 90 days to conduct an auction onsite. Should you opt for a cash purchase instead of co-hosting an auction, you will receive 10% of the purchase price upfront, upon receipt of your signed contract. The remaining 90% will be paid and delivered to you the day of the auction. In a cash purchase, you, the seller, assume no risk and have no interest in the outcome of the auction.

Guaranteed Auctions

Sellers occasionally require the certainty that the auction will make a specific minimum return. For those clients Key offers a Guaranteed Auction. In a Guaranteed Auction, the auctioneer guarantees a specific net minimum return for the sale of the equipment or real estate. Once the guaranteed minimum is met, the seller and auctioneer split any proceeds above the guaranteed amount plus sale expenses.