Diliberto Launches Auction, Advisory Firm

CHICAGO-Frank Diliberto, the former CEO of Inland Real Estate Auction, has started a new company. The company, Diliberto Real Estate Services LLC, will focus on real estate advisory and auction services.

“To a lot of people, starting a new real estate business at this time seems exceedingly risky, but my entire career has been geared to providing solutions to challenging markets. There’s no better time to offer fast solutions in the capital markets,” Diliberto says. “Auction and advisory experience along with an ability to raise financing for our clients is essential in solving the problems many owners face today, some of whom have never lived through a difficult real estate market.”

Diliberto says the auction market has changed over the years. Twenty years ago an auction was considered a last-ditch effort to sell a distressed property. But as the economy has ebbed and flowed, the auction process has become more mainstream and not always about distress. During the last ten years, Diliberto says he has seen more corporate and private owners selling high-profile and trophy assets at auction.

As a prime example, he cites the auction of Intel’s 428,000-SF, 68-acre manufacturing plant in San Juan, Puerto Rico. He also cites a National Auctioneers Association report that stated in 2008 auction sales in the US reached $268.4 billion. Of that, 21.8% or roughly $58.2 billion was real estate related.

“Today, the auction has reached an elevated plateau of acceptance as the go-to accelerated marketing method for some of the most desirable office buildings, vacation properties, new residential inventories, shopping malls, loan portfolios and real estate businesses,” Diliberto says. “While auctions can be the end-game exit strategy, it’s not always the case.”

As a result companies need to adjust their business model to reach these clients, still, Diliberto says, a company shouldn’t provide only auction services.

“The company that provides only auction services in today’s market is a one-trick pony,” he says. “Our advisory-based platform provides consulting services, leading to solutions by generating financing, enhancing value, workouts and turn-arounds, ownership restructures or loan sales. When accelerating a sale is ideal, the auction requires only four to six weeks to complete.”

Diliberto Real Estate Services has its first auction lined up for February 10. The firm is auctioning the newly renovated 20,000-square-foot building at 2248 S. Michigan Ave. The three-story building contains both office and retail space. It is owned by Steve Kmak, a local resident and international musician. Pricing details were not disclosed.

“It’s one of the finest properties on South Michigan Avenue, which makes it difficult to value,” says David Schy, VP of Diliberto Real Estate Services. “Secondly, the property appeals to investors and many different user types. And finally, the seller is offering seller financing, which is essential in this market. In each case, the auction will define value openly and publicly, while giving buyers in today’s market an opportunity to buy at a great price. Sellers are willing to pass along a discount in exchange for a time-dated sale.”