OACOMA, S.D. — The three highest bidders seeking to purchase tracts of land on 964 acres near Chamberlain walked away from Monday’s, March 9, live auction empty handed after the current landowners denied their bids.
With the volatility surrounding the stock market amid the coronavirus outbreak, the landowners shied away from accepting the highest bids, keeping the land up for sale. The 964 acres of land that were being auctioned Monday in Oacoma attracted about 40 interested bidders vying for the three tracts of land that are up for sale, which includes 500-plus acres of farmland located in Brule County, roughly 20 miles southeast of Chamberlain.
Bruce Brock, of Brock Auction Co. Inc., served as the auctioneer and provided extensive details about the layout of the land. After the highest bids were in and the auction wrapped up, Brock spoke with the existing landowners in private and relayed their decision to deny accepting the three bids that collectively equated to roughly $2.4 million.
“They said the bids were not too far away from what they’re looking for, but they just think the world is in too much turmoil right now to accept the bids at this time,” Brock said. “They would be more than glad to talk with the three high bidders.”
The nearly 1,000 acres of land up for auction was broken down into three tracts, meaning bidders could bid on each tract. While one bidder could solidify the highest bids for all three tracts, each of the tracts were auctioned separately.
“This is a tremendous opportunity, and timing for you as buyers couldn’t have been better,” Brock said, noting the volatility of the stock market amid the coronavirus.
Brock explained why the landowners chose to divide the land into three tracts, rather than selling the 964 acres together at an absolute value.
“When we lined this sale up two months ago, nobody heard of the coronavirus and nobody knew the stock market would drop significantly because of it,” Brock said. “I wouldn’t ask any of you to risk your life’s work in farming and ranching with the risk of something like this happening.”
Tract 1 includes 320 acres, along with a 48-by-72-foot building that could be utilized to the future owner's preference, depending upon the sale of the tract of land. Tract 1 and tract 3 each included 320 acres of land.
The highest bid for tract 3 came in at $2,275 per acre, while tract 2 saw a high bid of $2,300 per acre. Although tract 2 comprised the most land out of the three, it was tract 1 that saw the highest bid of the morning at $2,850 per acre.
According to Brock, the land has been used by the existing owners, David Martin and John Behrendt, as a private hunting estate for several years. Brock emphasized they have done a great job of building a wild pheasant, deer and upland game sanctuary. In addition, shelterbelts, food plots and filter strips are scattered throughout the land.
No personal property or equipment is included in the land auction, Brock noted. The bidders were expected to have made the proper financial arrangements prior to the live auction. In addition, Brock said no warranties are made to the soil productivity, water and environmental hazards and the property boundaries.
The terms attached to the land purchase would have included a 15% non-refundable earnest money deposit along with a signed purchase agreement for the highest bidder. Behrendt and Martin would pay 2019 real estate taxes due and payable in 2020, however, the buyer would be responsible for subsequent real estate taxes.
As a selling point, Brock pointed to the income that could be generated from the 500-plus acres of farmland and the potential of operating a hunting lodge. Despite the volatile economy, Brock said a constant that will remain for years to come is the need for resources and food, which the farmland that’s part of the auction has to offer for interested buyers.
Although the bids were denied after the auction, Brock said the highest bidders will have the opportunity to negotiate with the landowners who are selling the property.
“As we all know, things turn around and change fast,” Brock said. “Look at how much the stock market has dropped recently, but last week it saw an all-time high. And that will probably happen again, and we will all be a lot smarter because of it. But one thing we won’t be able to do is buy this ranch.”