Rabin’s Fascinating History in the Industry

Rabin is one of the few liquidation companies that can provide all of the resources you need whether it is a professional appraisal, to sell surplus equipment and machinery, or liquidate an entire business. As an international family-held industrial auction and real estate investment company in business for over 60 years, we have the size and financial ability to take on deals of any magnitude and of any complexity.  It is a fascinating story of how Rabin developed into one of the top auction and liquidation companies in the world.  

Shortly after serving in WWII and the Korean War, the Rabin brothers started a small business in the early 50’s selling war surplus through liquidations in their hometown of San Francisco.  By the end of the decade, Henry Rabin started his own business with a focus on liquidations. 

The 60’s presented an opportunity for the business to grow by holding several big auctions for companies in the mining business.  The Natomas Company was famous for extracting more than $100,000,000 of gold by hydraulic mining and the Golden Cycle Mining Company.  

The following decade brought the Rabin brothers back together to form Rabin Brothers Auctioneers in 1972.  One of the big accomplishments in 1975 was selling the Railway Express and their over 200 depots that required Rabin to stage and assemble 26 auctions in different locations across the U.S.  The 70’s also established Rabin as renowned experts in food service auctions with the Rheingold & Schaefer Brewing Companies auction.

By 1987, Rabin’s had its first airline auction with Braniff Airways and introduced the industry to theater-style auctions.  For the first time, buyers could view and bid on items while comfortably seated in a theater-like setting (in this case, out of the blazing sun). Shortly thereafter, all auction companies adopted this method.

In 1995, Rabin expanded operations internationally by opening an office in the United Kingdom.  Further expansion in 2003 included the Asia-Pacific with liquidation and auction of the Kraft chewing gum factory in China followed a few years later by an auction in the Middle East of the Tnuva Dairies, Israel’s largest food maker.  Please see our full history and timeline at the Rabin website. 

Rabin is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Our operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Please contact us to discover how we can help you with our professional asset liquidation process.

Definition of Terms Used in the Asset Valuation Process

For more than 60 years, Rabin has been a family-held industrial auction and real estate investment company, with a focus on the acquisition and sale of industrial equipment and facilities around the world.  This is the first of a blog series that defines common terminology used by the industry. 

Our information comes from the American Society of Appraisers.  ASA states that the following definitions are the starting point for terms that are based in standard appraisal theory.  Furthermore while they “provide the fundamental value concepts; they are not the only acceptable definitions, since contracts or jurisdictions may dictate somewhat different philosophies.”  The ASA definitions are as followed:

·         Fair Market Value - An opinion expressed in terms of money, at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts, as of a specific date.

·         Reproduction Cost New - The cost of reproducing a new replica of a property on the basis of current prices with the same or closely similar materials, as of a specific date.

·         Replacement Cost New - The current cost of a similar new property having the nearest equivalent utility as the property being appraised, as of a specific date.

·         Orderly Liquidation - An opinion of the gross amount, expressed in terms of money, that typically could be realized from a liquidation sale, given a reasonable period of time to find a purchaser (or purchasers), with the seller being compelled to sell on an as-is, where-is basis, as of a specific date.

·         Forced Liquidation Value - An opinion of the gross amount, expressed in terms of money, that typically could be realized from a properly advertised and conducted public auction, with the seller being compelled to sell with a sense of immediacy on an as-is, where-is basis, as of a specific date.

As leading industrial and commercial liquidators, Rabin has sold equipment assets in every trade sector and on almost every continent.  Our professional asset appraisal services provide an essential starting point for any asset-based lending or disposition process.   

At Rabin, our professional machinery and equipment appraisal team has been working together for more than 25 years—gaining extensive experience in nearly every facet of industrial equipment.  Our seasoned appraisers have completed hundreds of reports, providing our clients with real-world obtainable value conclusions.  Please contact us to learn more about our comprehensive services. 

Source:

Machinery & Technical Specialties Committee of the American Society of Appraisers, July 25, 2010

http://www.appraisers.org/Disciplines/Machinery-Technical-Specialties/mts-appraiser-resources/DefinitionsOfValue

Using Your Equipment and Machinery Assets as Collateral

Collateral is the property or other assets that a borrower offers to a lender to secure a loan, and will be forfeited and typically sold in the event of a default.  Very often businesses use assets such as equipment, machinery, buildings or inventory as collateral to reassure lenders that they have another source of repayment if the need should arise.  

When financing new business assets, they are in most cases automatically considered collateral until such a time that the loan is paid in full.  If the amount of equity you put toward the purchase of the new assets is considered insufficient, other assets may be required as collateral toward the debt. 

According to the U.S. Small Business Association, “Certified appraisals are required for loans greater than $250,000 secured by commercial real estate. The SBA may require professional appraisals of business and personal assets, plus any necessary survey and/or feasibility study.”  They further state that when real estate is being used as collateral, banks and other regulated lenders are required by law to obtain third-party valuation on transactions of $50,000 or more.

For any SBA loan, all owners are required to make a personal guaranty that consists of 20% or more of the business along with any other individuals who hold key management positions. They state that, “Whether a guaranty will be secured by personal assets or not is based on the value of the assets already pledged and the value of the assets personally owned compared to the amount borrowed.”

This is where the services of a company such as Rabin are invaluable by offering accurate third-party valuations to a business.  Our asset appraisal services provide an essential starting point for any asset-based lending or disposition process.  For over 60 years, we have expertly assisted companies with obtaining working capital by valuing assets promised as collateral to asset-based lenders and investors. 

Rabin is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency. 

Source:

Small Business Association https://www.sba.gov/content/collateral

Turnkey Investments

The term turnkey refers to something that is ready for immediate use and describes the sale of goods or services as well as the sale of properties that are finished and ready to move in to.  Thus the only thing an owner of a “turnkey property” needs to do is to simply put the key in and turn it. 

The term is also used in investment real estate for the sale of already established businesses.  In this type of sale, it typically includes all of the necessary equipment along with the experienced employees to continue to run the business.  Turnkey properties will vary from the level of involvement required from the new owners and many real estate turnkey investments need little or no maintenance other than to collect the monthly check.

Over the last several years turnkey properties have become increasingly more popular with investors and offer a unique opportunity for both the seller and buyer.  In many situations, an auction or liquidation sale is not in the best interest of the owner and doesn’t make sense from a financial perspective to liquidate a business that still has value. 

An example of an excellent turnkey investment opportunity is the marketing for sale of an existing facility which is not only running smoothly but is also doing well financially.  It may be the business just needs an influx of new capital and/or a managerial direction.  Nonetheless the business will generally realize a higher value if sold as a turnkey.

At Rabin we offer turnkey sales throughout North America and actively market and sell companies in their entirety, including equipment, inventory, intellectual property, customers, and often the attached real estate.  We have the ability to navigate through all the aspects of a complex sales process to give clients a compelling one-stop-shop value proposition.  With a unique combination of financial strength, diversified experience and unparalleled professional expertise, we have the experience and flexibility to take on a deal of any size and of any complexity.

Rabin is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency.  

The Art of Appraising Real Estate

At Rabin, we are a family-held industrial auction and real estate investment company with a focus on the acquisition and sale of industrial equipment and facilities around the world.  We acquire, re-develop and operate industrial assets in North America, and are experts in the appraisal of real estate as well as equipment and machinery assets. 

In order to list real estate to sell, finance, and obtain property insurance or to do an investment analysis, a professional appraisal is done to determine the value.  So what steps are used to appraise property?  Accurate commercial and industrial property appraisals are based on many concepts and require a more thorough process than is typically done on most residential property.  The following is but a few of the particulars that are taken into account in a commercial or industrial appraisal.

 

A seasoned appraiser must consider the highest and best use of the property, long-term industry trends and fluctuations, and market competition.  Also research needs to be done to learn if there are any legal restrictions pertaining to the property such as zoning ordinances and eminent domain, easements or encroachments.  Along the same lines an appraisal must determine if there are any environmental factors connected to the industrial use that may impact the value down the road. 

In addition more traditional factors are compiled such as comparable sales, replacement costs, location of the property and proximity to infrastructure such as railroads or highways. An appraisal will also factor in the value of the property based on the income it produces such as in rental properties and apartment buildings. 

Rabin currently owns and manages 1,625,000+ square feet of industrial real estate in North America.  The Rabin Management Company (RMC), a private real estate investment and asset management company based in San Francisco, California, currently owns and manages 1,000,000+ square feet of office, industrial, multifamily and retail commercial real estate in the Sacramento, San Francisco Bay area, and Michigan.

Rabin is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency.  Please contact us to discover how we may assist with your asset liquidation process.

How Does Depreciation Affect Your Equipment’s Value?

For accounting purposes, depreciation is defined as a decrease in the value of an asset as a result of wear and tear, age, or obsolescence.  Thus most assets lose value or depreciate over the course of their lifetime and need to be replaced once they reach the end of their lifecycle.  However when machinery and equipment assets are appraised, depreciation is handled in a slightly different manner. 

The NEBB Institute, who among other things certifies professionals in the art of machinery/equipmentappraisals, explains that depreciation has a different meaning to machinery and equipment appraisers.  They add that, “To appraisers, depreciation is the estimated decrease in value of an asset from its initial purchase price.  The estimated decrease is based on a number of criteria, such as physical, functional, and/or economic factors.”  In other words it may not matter what the actual age is of a piece of equipment, but rather if it is operational and still used in the industry.  Finally the most important fact that impacts the value of the asset is, “How strong is the market demand”?

By having a professional appraisal done before you try to market your surplus equipment, will help to ensure you get the maximum value for your assets.  Additionally there are some circumstances where it is not only a good idea but may be required for insurance purposes, mergers and acquisitions and in orderly or forced liquidations. 

Another reason that certified appraisals make sense is they are more readily accepted by financial institutions and corporations as well as the IRS and the courts.   Keep in mind that appraisals are defined by factors such as replacement cost for new or used equipment or machinery, fair market value, geographic location and specialized design and/or modification.  Other considerations that impact value are technological obsolescence and industry trends as well as economic fluctuations. 

 Sources: nebbinstitute.wordpress.com/

Rabin Worldwide is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency.  Please contact us to discover how we may assist with your asset liquidation process.

Rabin Holds Auctions for a Variety of Industries

As specialists in the industrial marketplace, we have developed relationships that bring together an international network of buyers for industrial machinery and equipment.  As such, our auctions encompass almost every industry and we typically have several auctions in one stage or another that we are servicing that span a range of industries. 

To facilitate finding the machinery and equipment your company is looking for, Rabin organizes our website so you can easily find a particular auction of interest and view upcoming ones.  Also you can search by an industry division such as Agriculture, Beverage-Bottling, Construction and Mining, Food Processing, and Metalworking among others.

Areas we offer our expertise include:

Chemical Processing	Woodworking	Pharmaceutical	Trucking & Distr.
Food Processing	Plastics & Recycling	Snack Food	Mining
Agriculture	Metalworking	Construction	Packaging
Audio & Video	Bakery	Printed Circuit	Dairy
Building Equipment	Beverage	Heavy Equipment	Confectionery
Printing & Graphics	Real Estate

An example of a Rabin upcoming auction is in our Metalworking division for the Enormous Aluminum Smelting Facility (formerly the Ormet Corporation) in Hannibal, Ohio.  This auction will be held on site as well as simultaneously online and is scheduled for November 4, 5, 6, & 7, 2014.   Interested buyers do need to register and we encourage you to read all of the payment instructions and requirements beforehand.  Registration can be done online or in person at the auction site.  You will be asked for a form of deposit and need to have a credit card.  Once that is done, you are given a bidder number.

Another auction is from our Food Processing division and is an online auction taking place November, 2014.  Items for auction are food processing and packaging machinery that is surplus equipment from the HJ Heinz GmbH, in Seesen, Germany.

As you can see, we have a diverse, international business and we encourage you to check Rabin’s site for new and upcoming auctions.  If you have questions regarding an auction, please contact us. 

Rabin is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward,and the Railway Express Agency.  Please contact us to discover how we may assist you with liquidation or auctions services.  

The Advantages of Orderly Liquidation

The definitions for Orderly Liquidation Values (OLV) and Forced Liquidation Values (FLV) are similar but with one of the differences being the time period permitted for the sale of the assets.  Orderly liquidation allows businesses to sell assets over a reasonable amount of time and for reasonable prices, whereas in a forced liquidation, assets must be sold in the shortest time possible and for whatever price they bring.

Also in orderly liquidations, the seller has more control over the process, which is different from that of forced liquidations.  Under forced liquidations, sellers do not control the process but rather a bank or other financial institution is generally the one in charge.  The assumption in orderly liquidations is that a company can afford to negotiate the selling price of their assets with potential buyers and sell to the highest bidder.  Additionally when a company is given reasonable time to liquidate, assets can be sold at the most appropriate time and be offered to the widest audience.  Thereby, they typically sell for higher prices than in forced liquidations.

Conversely in forced liquidations, potential buyers are aware of the speed in which the sale must be conducted and go in expecting to get a real bargain from a seller who is compelled to sell.  This is why FLV are generally much lower than OLV.

Businesses facing orderly liquidation or forced liquidation can hire a firm that specializes in asset recovery and disposition services to manage the entire project and help to obtain maximum value for the company’s assets.  Since asset appraisal is the essential starting point when facing liquidation, you want the most experienced appraisers such as our team at Rabin.  We provide businesses with fair market values for their assets as well as give them the OLV or FLV that is based on our actual sales or that in the marketplace.

Sources:
nebbinstitute.wordpress.com/2014/06/11/the-difference-between-orderly-liquidation-forced-liquidation-and-fair-market-values/

Rabin Worldwide is an international company that specializes in creating liquidity for manufacturing facilities with idle or marginally productive assets.  Rabin’s operations include selling entire plants or surplus individual items by auction or liquidation and much more. Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency.  Please contact us to discover how we may assist with your asset liquidation process.

Take a Try at Selling or Buying at Auction

If you are looking to sell surplus equipment or would love to buy someone else’s, why not try an auction.  Auctions present a great opportunity for companies to quickly obtain needed capital and are an excellent way to purchase additional equipment.  It is prudent to use the services of a reputable auction house and Rabin Worldwide is just such a firm with a history of over 60 years in the industry.
Our longevity means we have experience in nearly every facet of industrial equipment.  Rabin provides services that are tailored for large companies as well as expertly handle sales for smaller businesses.  One example of an auction we recently completed was for the Jones Brothers Construction Company, under our construction and mining division.  

For the Jones Brothers’ auction, Rabin provided our buyers all the needed information along with a selection of high-quality photos for each item listed.  Their auction as well as all Rabin auctions listed details on the equipment that included model and serial numbers, manufacturer, and age of the equipment.  When it was useful, numerous pieces of equipment had videos showing them in operation.  Furthermore we gave potential buyers the information on where the equipment was located and the amount of operational hours the piece had logged.

For our buyers, we make it easy to get started.  Rabin’s online site lists the opening bid and reserve amount along with details on when the live bidding opens and when the proxy bidding opens.  There is a link on each auction page that takes you directly to our easy registration process.  We do caution that you allow at least one business day for your bidding registration to be approved.  For any further questions, please contact your Ad Representative or call Auction Customer Support at 800-334-7443 or 402-479-2119.

Advantages of Being at an Auction Site

While we are extraordinarily proud of Rabin’s online auction services, we think you will agree that there is no substitute for the fun and excitement that is present at a live auction.  Obviously our online auctions offer the unique opportunity to bid on items from around the world without incurring the expense and time of traveling to each location.

That being said, live auctions do have some advantages.  No amount of pictures or verbal descriptions can tell the story as well as being on-site to visually inspect the equipment up-close and take measurements.  Furthermore it provides the opportunity to meet the auctioneer in person.  You may even try your hand at influencing the grouping of auction items by expressing interest in a group to him or her.

If you are traveling to the auction site, we always recommend you try to attend the public pre-inspection to view items that you want to bid on.  And since RabinLive auctions are simultaneously a live auction and an online auction, we make it easy to get set up to bid from an online location if you have to leave the auction early.

Another advantage to being there is that you have the opportunity to meet our team at the auction site and get inside scoops on items that you are interested in from our set-up staff.  For example, if we have identical batches of items being sold as "buyer's choice," you may be able to glean some hints about which ones to choose in the event you win the bid.
Plus physically attending an auction provides the chance to come into direct contact with other bidders.  You can network among your peers and meet new contacts in the industry.  Also since you are face to face, you can check out your competition and see what you are up against in terms of bidding.

Moreover we provide expert advice on crating, packing, and shipping your new items.  Our team will answer questions such as the best ways to transport items and what size truck you need.  In addition we can direct you to our contacts in the field that have the know-how to move heavy equipment and machinery.  

Rabin Worldwide is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency.  Please contact us to discover how we can assist with any type of company liquidation.

How to Become an Auctioneer

Professional auctioneers work hard at their craft and the job involves hours of practice and training.  To find more information on the profession, the National Auctioneers Association (NAA) is a great resource.  Founded in 1949, they are the world's largest association dedicated to professional auctioneers and represent individual auctioneers servicing a wide range of industries.   

The NAA recommends that anyone interested in becoming an auctioneer starts attending auctions to get an idea of the profession, and if still interested, to find an auctioneer school.  Their website publishes a comprehensive list of schools throughout the U.S., Canada and across the globe. 

An auction school teaches students the art of bid calling as well as provides training on how to start and operate an auction business.  They show students the best ways to market their services along with sale’s techniques.  Many auction schools have websites so you can take a look at the requirements and curriculum for schools in your area. 

Looking at a website for one school in New England, they state that all of their instructors are professional auctioneers.  Their program consists of 80 hours of coursework that meets or exceeds the New England States’ educational requirement as well as many other state’s requirements.  The curriculum focuses on auction law and professional ethics along with personalized bid calling and coaching. 

To give an example of the requirements for the New England States, you need 80 hours of certified course work that includes 50 hours of core curriculum and 30 hours of optional curriculum. Core curriculum subjects are Auction Law and the Uniform Commercial Code, Ethics, Contracts and Legal Matters, Accounting Procedures, Advertising, and Bid Calling. Their licensing requirements meet or exceed the requirements of most of the 50 states for certification, and they also have reciprocal licensing agreements with many states.

Also the NAA offers its members continuing educational programs and resources to help them advance in the profession.  The organization’s other benefits include access to the Online Networking and Mentoring Forum and an opportunity to attend conferences and shows.  All members of the NAA abide by a strict Code of Ethics. 

Sources:

auctioneers.org/schools

For over 60 years, Rabin Worldwide has been assisting companies with creating liquidity through innovative solutions. We specialize in complex manufacturing facilities with idle or marginally productive assets. Rabin’s operations include selling surplus individual items, entire plants, or multiple plant locations by auction or liquidation and much more. When you need to sell assets, realize your maximum value by using the services of highly experienced commercial liquidators.

Different Types of Auctions

At Rabin Worldwide, we use an English auction style but there are numerous types of auctions.  The English auction is also called an ascending-bid auction and has an auctioneer, an audience of bidders, and a bidding process that moves quickly.  It is probably the most widely known format.

Today English auctions have easily moved into the electronic age and are carried out in real time with bidders physically present on-site or electronically connected through the Internet or by phone.  The auctioneer opens the bidding up at a low price and the competition among bidders is what drives the price higher.  Bidders shout-out prices or raise their bid paddles, and online bidders submit their bids electronically.  The price of the item continues to go up until all of the bidders but one drop out.  By default, the highest bid wins the item.

Less commonly used is the descending-bid auction or what is known as a Dutch auction.  It works in a similar fashion as the English auction in that it is interactive but prices start high and drop until bidders are willing to accept a price that meets the seller’s reserve price.  The strategy behind this method is that bidders have to be aware of the competition they face and act quickly to secure items.  The term Dutch auction comes from the fact that flowers in the Netherlands are sold using this process.   

Another kind of auction is the first-price sealed-bid auction or blind auction.  This is where all bidders simultaneous submit one sealed bid to the seller.  The sealed bids are opened all at once and the winner of the auction is the highest bidder.  Businesses and the government use this method to procure services and to award contracts to the lowest bidder.

Second-price sealed-bid auctions are also called Vickrey auctions.   These auctions are done in the same method as sealed first-price auctions but differ in the fact that the winning bidder does not pay his bid amount but rather that of the second highest bid.  This system encourages buyers to bid high since they know they will not pay their bid price and is similar to the bidding process used on eBay.  Wikipedia states that, “Vickrey auctions are also commonly employed in digital advertising, powering real-time exchange environments for display advertising, search engine marketing, and Facebook advertising.”

Sources:

cs.cornell.edu/home/kleinber/networks-book/networks-book-ch09.pdf

en.wikipedia.org/wiki/Auction#Types

Rabin Worldwide is an international company that specializes in creating liquidity for complex manufacturing facilities with idle or marginally productive assets.  Rabin’s operations include selling entire plants, multiple plant locations, or surplus individual items by auction or liquidation and much more. Past auctions include names such as Hostess, Braniff Airlines, Montgomery Ward, and the Railway Express Agency.  Please contact us to discover how we may assist with your asset liquidation process.

Rabin Live Auctions

Rabin Worldwide onsite auctions offer bidders an opportunity to participate from wherever they have a computer.   We generally use one of the following two platforms for online bidding and will indicate on the auction announcement page which system is being utilized for a particular auction.  It will be either our proprietary online system, RabinLive, or Bidspotter, a third party online bidding system.  We supply all the information on how to bid and what the requirements are for your computer.

A RabinLive auction is both a live auction and an online auction.  It takes place simultaneously in real time between bidders on the floor at the live auction and bidders online using our bidder’s console.  In order to participate, you must be registered for that sale and can register either online or in person at the auction site.  A credit card is required to register and a form of deposit.  You will then be given a bidder number.

Even if you registered for the live auction site, you can still register to become an online bidder if your situation changes and you cannot attend the live auction.  The process is easy and you will only need your e-mail address and credit card information during the registration process.  Once completed, go to rabin.com and click on "Buy" at the top of the screen.  Look for the auction and click "Register to Bid".  It will walk you through the registration process.  Once you have successfully completed the process, you will see a "Bid Now" button. Click on the button to get to the bidder’s console.

For more information regarding Rabin auctions, see our website or talk to one of our sales representatives.  We make our auctions both easy and fun to participate in.

 

 

For over 60 years, Rabin Worldwide has been assisting companies with creating liquidity through innovative solutions. We specialize in complex manufacturing facilities with idle or marginally productive assets. Rabin’s operations include selling surplus individual items, entire plants, or multiple plant locations by auction or liquidation and much more. When you need to sell assets, realize your maximum value by using the services of highly experienced commercial liquidators.