Three November Auctions Will Seek to Quicken RTC Pace
To clean up moreresidue from the savings and loan crisis, the Resolution Trust Corp. is preparing to auction off parcels of real estate ranging from a Palm Springs, Calif., golf resort to an Ohio senior citizens home.
The sale will be the largest and most diverse that the two-year-old federal agency has attempted. It comes in the wake of severe criticism in Washington over the agency's handling of foreclosed real estate seized from failed thrifts.
Properties in six states with aggregate reserve prices of $80 million will be on the block next week in Cathedral City, Calif., at the DoubleTree Resort and Desert Princess Country Club -- which itself is to be sold.
Accelerated Sales Drive
This is to be the third of three major RTC real estate auctions in November and part of an agency drive to hasten the sale of properties. It began last June with "the great Texas auction," in which 1,400 parcels in that state were sold in 10 back-to-back auctions over eight days.
Besides the California and Ohio realty, properties in Arizona, Florida, Missouri, and Texas are to be sold.
For its effort, the RTC has hired Kennedy-Wilson Inc., Los Angeles, one of the nation's premier firms specializing in marketing distressed real estate.
Kennedy-Wilson has sold more than $500 million in "other real estate owned" for banks. Its auctions are lively affairs, usually held in hotel ballrooms or large tents and often featuring food and live music.
The company has, in turn, hired CB Commercial Group, Los Angeles, the nation's largest commercial real estate brokerage firm, formerly Coldwell-Banker, to assist in RTC-related activities.
Last week, Kennedy-Wilson said it had sent out more than 5,500 40-page, four-color catalogs for the upcoming auction. In addition, 580 "due diligence" packages had been ordered by potential bidders -- an average of 41 per property -- at $100 per copy.
14 Properties on Block
The 14 properties going under the gavel Nov. 21 are nine office buildings, three apartment complexes, and two shopping centers. Largest is the 500,000-square-foot Amerifirst Park office center in Miami.
The DoubleTree Resort, where the auction will be held, has 289 rooms and a 27-hole golf course. It was acquired by the RTC in the 1989 failure of Gilbraltar Financial Corp., Los Angeles. Its published reserve price at auction is $9,090,000.
The reserve price is the minimum high bid the RTC will guarantee to accept.
If the highest bid is below the reserve price, the RTC has 30 days in which to accept or reject it, but in an effort to expedite sales, the agency has said it will make such decisions within two hours of the auction.
"The response to this auction is absolutely tremendous and should result in a successful and exciting sale," said J. Penny Larson, RTC national auction marketing specialist.
The 277-bed Cottingham Retirement Center in Sharonville, Ohio, near Cincinnati, is probably the most unusual property listed for sale. Its published reserve price is $5,850,000.
Storage Facility Top Priced
The highest reserve price listed is $13,750,000 for the Los Feliz Stor-N' Lok, a self-storage facility in Los Angeles.
The RTC is offering 85% seller financing on the properties, except for the storage facility, which has assumable financing.
The bailout agency has been setting a fast pace lately. Nov. 2, it auctioned parcels of raw land near Phoenix, which attracted 200 bidders. This week, it will hold an "affordable housing" auction in three Texas locations: Dallas, Houston, and Austin-San Antonio.