The Bangor Mall received a high bid of $14.95 million at auction Wednesday from an as-yet-undisclosed party as a bidding war drove up the price in the final minutes of the auction and extended it more than 75 minutes.
The seller set a confidential reserve price before the auction to denote the lowest sale offer that would be acceptable to move ahead with the transaction. It typically is higher than the opening bid, although the seller can declare a winning bid whether or not the reserve is met.
Auctioneer Ten-X has not yet commented on the sale, though the reserve line on its website said the reserve had not been met as the auction ended.
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Without that price being met, it is not a certainty that the highest bid on the auctioneer’s website would be accepted by the seller, parties involved in the auction said.
If the seller accepts the bid, the price paid for the property will equal the final bid price with a 5 percent premium for the sellers, Joe Cuomo, senior managing director at the Ten-X headquarters in Irvine, California, said Tuesday.
That would put the total price at about $15,697,500.
If a winning party is declared, its name will remain confidential until the sale closes, typically in about 30 days, according to Ten-X.
It also is unclear whether a winner would try to keep the mall running or develop it into another type of enterprise.
The auction ran from 11 a.m. local time Monday and officially was to end at 11 a.m. local time on Wednesday. The bidding war, however, extended the auction more than a dozen times for about 75 minutes.
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On Wednesday morning, the opening bid of $6.5 million rose after being stagnant for almost two days on the auction website. By 9:30 a.m., it was at $8.5 million, having risen earlier to $7.5 million.
With less than 15 minutes left before bidding was scheduled to close, the bid rose to $9.5 million. The minimum bidding increment was $1 million until the last 15 minutes of the auction, when it was changed to $500,000.
Cuomo of Ten-X said that it is common for bidding wars to occur in the final half hour of an online auction.
“Any bid made inside two minutes of the closing time of the auction will add 3-½ minutes on the auction clock,” Cuomo said.
As Cuomo predicted, with just less than 3 minutes left before bidding was to close, the bid rose to $10 million.
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At about 20 seconds and with the bid clock flashing red, the bid rose to $10.5 million and 3-½ minutes were added to the auction clock.
With four seconds left to the added time and a “going twice” warning, the bidding went to $11 million and more time was added, though the reserve still wasn’t met.
The bid increment was lowered to $250,000, and in the last seconds of the second time added, the bid reached $$11.25 million.
With the clock running out, when the sixth time extension was made as the bid rose to $11.85 million, the bid increment lowered to $100,000.
The bid increment was later lowered to $50,000, and then to $25,000.
As the auction ended with the $14.95 million bid, Ten-X’s website did not show that the reserve had been met, which typically is done by turning the reserve line on the website green.
Ten-X representatives and the mall’s current manager, Frederick Meno, declined to comment on the auction.
Meno is president and CEO of asset services at The Woodmont Co., which also manages the troubled Aroostook Centre Mall. Ten-X also has advertised that mall for sale at the best offer price, though it is being sold through traditional commercial real estate channels rather than an online auction.
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The amount of the reserve is confidential, said Thomas Dobrowski, executive managing director of Newmark Knight Frank Capital Markets in New York, which has been marketing the Bangor Mall. Dobrowski specializes in selling regional malls.
“If the reserve is met, it’s a safe assumption that the mall has sold,” he said.
If the reserve isn’t met, the seller can still decide to accept the highest bid or just take the property back. However, Dobroski said he could not comment on whether the seller has accepted a bid or not.