REAL ESTATE : Private Sector Takes Tip From RTC With Huge Public Auction

It will be one of the largest commercial real estate auctions to date. On Aug. 13, half a billion dollars worth of properties across the United States, including two in Orange County, will go on the block.

But there’s a twist. None of the 68 office buildings and apartment complexes are the property of thrifts taken over by the Resolution Trust Fund. Huge public auctions have become a common tactic by the government for unloading the real estate it has inherited from failed savings and loans. Now the private sector is taking that route.

The August sale, to be held at the Century Plaza Hotel in Los Angeles, will be a joint venture of Kennedy-Wilson Inc., a Santa Monica real estate marketing company, and London-based consulting firm Jones Lang Wootton.

Orange County’s showing in the auction will be rather meager: two small Newport Beach office complexes with a combined value of about $4 million. Both are 80% occupied, which is in line with Orange County’s overall vacancy rate of 21%.

Both buildings sit on long-term Irvine Co. land leases, a fact that has made them tough to sell. “One of the properties has been on the market for more than a year,” said Bob Smith, a broker in CB Commercial Real Estate Group’s Anaheim office.

Smith, who represents the sellers, described the auction as a “marketing vehicle for the owners to get a great deal of exposure through collective, broad-based advertising.” He would not say who owns the buildings.