YOUNGSTOWN Auction of bank building is canceled

The auctioneer called the cancellation 'shocking.'
By CYNTHIA VINARSKY
VINDICATOR BUSINESS WRITER
YOUNGSTOWN -- A Baltimore-based auctioneer was forced to cancel an auction sale of the National City Bank building on Federal Plaza when only one bidder showed up, but that investor and at least one other may still be interested.
The bidder refused to identify himself to reporters before leaving the Holiday Inn MetroPlex auction site Tuesday, but a spokesman for auctioneer Michael Fox International said the bidder expressed an interest in discussing a possible sale.
Two representatives from Barlynn Corp. of Monroeville, Pa., arrived about 45 minutes after the scheduled auction time Tuesday, too late to bid.
Gurdial S. Mehta and Daljit S. Khara said Barlynn might still be interested in buying the nine-story National City Bank building and will be in talks with Fox. They said the development company owns several properties in Pittsburgh, including a 13,000-square-foot building in that city's downtown.
Many requests, one bidder
William Fox, chairman of the auction house, said he was "very surprised and shocked" at the lack of bidders, especially because he had received more than 100 requests for packets from interested investors. He said the company advertised the auction widely, running ads locally as well as in the Wall Street Journal and trade publications.
"This is a class A building, it's extremely well maintained, and it has a great tenant with nine years still left on its lease," Fox said. "It's just what investors are looking for, but I guess not in Youngstown, Ohio."
Fox said a lack of bidders can generally be attributed to an overpriced building or a troubled local economy. Fox said he's not familiar with the Mahoning Valley's general business climate, so he stopped short of blaming the Valley's depressed business climate.
The building is not overpriced, he argued, pointing out that it has a net operating income after expenses of $570,444 a year. Fox was authorized to sell it at auction for $3.995 million or higher, but he said commercial real estate is often priced at 10 times its net operating income, which would justify a selling price of $5.7 million in some markets.
Building's owners
Building owners Michael Camacci and Rokki Rogan, partners in Landmark Commercial Real Estate Services in Austintown, have a tentative agreement to sell it to Diversified Equity Holdings, a real estate developer in Phoenix. Rogan could not be reached and Camacci did not return a call requesting comment.
Fox said the Arizona company made a deposit on the building and scheduled the auction, with plans to sell the building for a profit and pay off the local owners. He said the process is common in real estate deals.
Now that the auction plans are canceled, he said, Diversified Equity Holdings could back out of the deal, if its contract allows it, could go forward with buying the building or could negotiate a sale to another buyer. Fox would not divulge how much Diversified offered Camacci and Rogan for the building, how much it put on deposit or the date of its purchase deadline.
Fox said the building is 80 percent occupied, with National City Bank occupying about 69 percent. The bank is in the sixth year of a 15-year lease, which runs through March 2012. The Green, Haines & amp; Sgambati law firm is another major tenant. Camacci and Rogan bought the building in 1997 for $2.55 million.
vinarsky@vindy.com