Last year, CoStar’s online auction arm Ten-X launched its first “Battle of the Bids,” a fantasy-football-style contest where players make educated guesses on what commercial properties will sell for at a Ten-X auction. They can win $1 million — plus $100,000 for the charity of their choice — if they guess the closest to the real sales prices over eight rounds.
There was just one problem, according to Ten-X President Steven Jacobs. A lot of the agents and owners thought the contest was too good to be true.
The winners on most game shows only walk away with a few-thousand dollars, he said. That the auction platform was giving away $100,000 to the winner of each round of play plus the $1 million grand prize was hard for many agents to believe.
But that all changed when people started winning.
“We saw an incredible growth of players from round to round,” he said. “This guy just won $100,000. This woman just won $100,000. They saw that it was real.”
The second “season” of Battle of the Bids will kick off on Sept. 8 and this year registrations are “through the roof,” Jacobs said. As of the end of August, there were 5,800 people registered for round one, a 170 percent increase over round one last year.
The game this year will be very similar to last year: players will still pick 10 properties to place their bets on before each round of auctions begins. Points are awarded depending how close they get to the sales price — down to the dollar — when the building sells a few days later. If they bet on a property that doesn’t trade, they get no points for that pick. They can also reprice two bets in each round as the bidding is coming to a close.
One player who will definitely be back is last year’s grand prize winner Mike King, a Seattle-based VP at Kidder-Mathews who specializes in net lease investments.
He admitted that he also had his doubts when he first started playing last year, putting only a few minutes into preparing for the first round. But when he finished in the top 10 in that round, he realized he had to get serious, spending a “substantial amount of time” researching the properties in each round of bidding.
He bet mostly on what he knows best, retail and shopping centers, and ended up getting into the top 10 in rounds one, three and seven. He won first place in the eighth round, which gave him enough points to win the overall game.
“It was kind of a little surreal,” he said. “They said, ‘Congratulations, you won round eight!’ I kind of knew that and I was pretty sure I had won the whole thing. And they go, ‘We’ll let you know in the next two weeks if you won the whole thing.’ … [T]hey called back an hour later and said congrats on the whole thing.”
King said he and his wife had a little bit of fun with their winnings — taking their extended family to Disneyland—and invested the bulk of the proceeds in an industrial property in Alaska. He chose Big Brothers, Big Sisters, where he has been a Big Brother for 15 years, as his charity.
He plans to choose the nonprofit again if he wins this year, he said. He said he’s going into the contest with a “target on my back for sure.”
“I’ve had people call for advice and I’m like, I’m playing too. I can’t give away all the secrets,” he said.
Learning from Last Year
Jacobs said they took feedback from last year’s players and from within CoStar when planning this year’s event and made a few tweaks.
There was a consensus that the event went on too long, so it will shrink from eight rounds to six. There will also be a runner-up mystery prize that will be worth $100,000 because Jacobs said he felt bad that the second-place winner came away with nothing last year, especially when the contest was “neck and neck.”
The runner up prizes in all the rounds have also been increased.
To build excitement, a professional film crew will do a livestream of the event from the Ten-X offices that Jacobs said he hoped would feel like the announcers at a horse race giving live updates and commentary to the betters. Senior VP Todd Gladis, who once voiced the Atlanta version of Moviefone and hosted sports radio shows in his college days, will be the emcee.
Another big shift is that this time the event will be open even to CRE brokers who are not already in “the Co-star ecosystem,” Jacobs said, as long as they have transacted on a commercial real estate deal in the last three years.
“Mid-season one I said, ‘I think we made a little bit of a mistake here. Every deal we do has a broker and brokers are our partners. We should open this up to all commercial brokers,’” he said. “We want to build our business—that’s part of the branding, we want them to get in to understand the platform—and there’s no better way to get the brokers in.”
Even if the new players don’t turn into new subscribers, Jacobs said the event will be worth it if it can help remove some of the stigma around the types of properties that sell at auction.
“The whole thing about auctions being for distressed properties is just not true,” he said. “Another thing that’s great about this game is that they get to come in and see that 90% of our business is not distressed.”
The publicity is clearly worth millions to CoStar. Jacobs would not say the total amount spent on the event, but said there’s $3 million in total prizes and “several million” spent on marketing and operations costs, including a mini-movie ad that plays into this year’s “Top Gun”-ish theme. It’s costing the company less overall than it would spend on a traditional marketing campaign to greater results, he said.
“We hope that it becomes our annual branding campaign,” he said.