Auction or Just a Gimmick

[David Fritch]

There is a commercial property (strip mall) up for sale on auction.com later this month in my area. A group of us are interested in bidding. 

In our research we found that the property was purchased at a trustee sale in August of this year for 3.1 million dollars. We don't know exactly who this LLC was but they are using the registered agent from the state capital and Wells Fargo is listed as the primary officer. The listing broker says he "thinks it is a debt servicing company". The minimum bid on the property just dropped from 1.8 million to 1 million. The listing broker says that was because they did not have enough interest at the 1 million dollar minimum.

Many of the factors lead me to believe that the seller has a high reserve that they probably do not expect to be met. Of course they would love to make a quick profit if that happens but this auction is mostly about testing the market and finding leads. Based on net operating income and cap rate the property should sell for around 5M, and better opportunity for results with good management.

Is there any chance that this is a real auction and the highest bidder will walk away with the property if it's less than 5M? I feel if seller wanted top dollar they would widely advertise and do a live auction not a quieter sealed bid. My associates feel this may be a bank cutting losses?? Any have experience with Auction.Com on a similar situation?