Highly regarded Las Vegas properties go for unremarkable prices at auction
As bids on three luxury homes inched along at a painfully slow pace, Frank Trunzo reached deep into the tricks that made him a champion auctioneer.
He conversed with some on the bidders by first name to try to coax more money. He called several timeouts to allow those in the room to make hushed cellphone calls to partners. Twice, as the bidding stalled, he threw in a bonus to jump-start the action.
In the end, however, all of this yielded just meager results Friday evening. The three properties, a 55th-floor penthouse at Palms Place, the Tom Ford Ranch on East Russell Road and the Palms Estate on South Pecos Road built by the late casino magnate Ralph Engelstad, went for a combined $5.9 million in separate auctions to unidentified bidders. The seller, Texas businessman Lacy Harber, had estimated they would fetch from $13 million to $15 million.
“We found out what the market was, and I am satisfied with that,” said Harber, who has frequently visited Las Vegas since the 1960s and financed the now-abandoned attempt to convert entertainer Wayne Newton’s former estate into a theme park. “I would like to have gotten more money, but I have no regrets.”
This is not another story of a speculator who threw caution aside during the real estate bubble and got singed during the bust. Harber and his wife, Dorothy, had purchased the properties for a combined $9.4 million at different times for different reasons starting in 2010, well after values had plunged, according to county records.
Amid indications that the high end of the market has rebounded, a couple of brokers who attended the auction at the Palms Place were taken aback by the results.
“I could have gotten that much by just opening the door and yelling down the street,” said Malcolm Boot of American Realty &Property Management.
He believes that prices would have risen had the properties been more widely marketed.
Executives at Concierge Auctions, which staged the sale with Sotheby’s International Realty, said they had shown the properties to a steady stream of people for six weeks. More than 200 were serious enough to take bid packages, and 18 put in $100,000 deposits to qualify them as bidders.
“I think they did a very good job,” Harber said.
Rochelle Hornsby of Century 21 Aadvantage Gold had estimated the Ford Ranch and Palms Estate would sell for more than double what they did.
The combination of an auction, a different environment from a negotiated deal, and the no-reserve feature that meant Harber would take the highest bid regardless of the size had depressed the results, in her view. In a reserve auction, the sale can be called off if the results fall short of a minimum price.
“This was an individual thing that had nothing to do with value of the properties,” she said.
For his part, Harber counted a pair of factors that hurt. The carrying costs of the three properties ran about $60,000 a month, including taxes, maintenance, HOA fees and utilities. The Ford Ranch has nine electric bills, he said.
“The thing that scares people is not what it costs to get in but what it costs to stay,” he said.
Further, he said that people told him the noise from McCarran International Airport’s main landing path, less than a mile from the Palms Estate and the Ford Ranch, diminished the value. The two brokers, however, discounted this explanation.
The future concern for the brokers is that sales could hurt the market because comparable sales generally influence other prices.
“It certainly won’t help,” Boot said.
For his part, Harber said that even if he takes some bruises early in the year, his experience in business has showed he would do well on other deals and come out ahead by year’s end.
“I sold two of the finest homes (Palms Estate and Ford Ranch) at practically giveaway prices,” he said. “You could say I left some Texas money in Clark County.”