In what could be the first sign of thawing in downtown Orlando's iced-over condominium market, an auction of bankrupt tower The Vue at Lake Eola is attracting a pack of big-money bidders.
The auction set for Monday of 165 units at the Vue, along with more than 7,900 square feet of vacant street-level retail space, drew nine bidders — a virtual mob by today's stale market standards — including Joe Lewis' Tavistock Group.
Though the Tavistock name is a local heavy-hitter, the privately held investment company's play at becoming the lead-off bidder was denied last week.
Tavistock attempted to become what's known as the "stalking horse" bidder, which sets a floor price and is typically guaranteed a small payout in exchange for offering a first, firm bid if its final offer is ultimately rejected.
But that position went to a company called Blue Key Investments LLC even though, according to court documents filed by Tavistock attorney Roy Kobert of Broad and Cassel, Tavistock offered $21 million — $750,000 more than Blue Key — as well as a higher deposit.
Janne Keskinen, a Finnish real estate investor who owns a home in Lake Worth and is leading Blue Key on behalf of a group of European investors, said The Vue is a good buy.
"It's a good tower, it's new, the location is good in the downtown," he told me. "We are pretty close to the bottom [of the market], but not yet. It's going to be a long-term investment, anyway."
He said he wasn't familiar with Lewis or Tavistock, though he expected formidable competition at the auction. The other bidders, which had to submit $1 million deposits by Wednesday, have not yet been revealed in public documents.
Tavistock officials did not return messages seeking comment, but one of the company's court filings hinted that it is supporting a bill in Tallahassee that would make condo properties more appealing investments and help jolt the market.
A bill (HB 327) sponsored by Rep. Julio Robaina, a Miami Republican, would allow people buying condo units in bulk in distressed buildings to escape the "developer" label and, in turn, shake off any potential liability that would come along with that.
Taking away potential developer liability would likely push more investors into the condo market and begin to drive prices back up again.
"It is a hurdle all these folks contemplate," said Scott Shuker, attorney for The Vue. "Removing any obstacle in today's market will help."
Tavistock's offer to be the "stalking horse" came with the caveat that it be cleared of that liability. Blue Key's bid came with no such stipulation and, as a result, its selection "came down to more certainty," Shuker said.
The winner of the auction will own nearly half the 36-story tower's units plus all of its retail space, which has never been filled.
If Tavistock, the owner of Isleworth Country Club as well as the Lake Nona development that includes its so-called "medical city," prevails it will not be the company's first foray into the downtown scene. Ten years ago the company owned the Church Street Station complex and several nearby blocks before selling those properties.
The auction will start Monday at $20.3 million and go up in $100,000 increments from there.
"The sky's the limit," said auctioneer Lamar Fisher.
Beth Kassab can be reached at firstname.lastname@example.org or 407-420-5448. Read her blog at OrlandoSentinel.com/thebottomline.