Never Before. Hopefully Never Again.
The RTC liquidated approximately $394 billion of assets and over $85 billion in real estate from failed savings and loan associations
GOSWICK & ASSOCIATES RTC ACCOUNT TEAM:
David Goswick, Account Leader & Creative Director
Richard Goswick, Account Supervisor
Renee Lewis, Account Executive
David Toner, Account Executive
Tracy Schmeisser, Media Planning & Buying
Kimberl Guerre, Creative & Graphics
Mark Stouse, Public Relations
Greg Burns, Events
In the early 1990’s, Goswick & Associates played a significant role in helping market the U.S. Federal Government’s Resolution Trust Corporation (RTC) assets during the savings and loan crisis. Their efforts involved several key strategies and activities aimed at maximizing the visibility and attractiveness of RTC assets to potential buyers. Here are the ways they contributed:
Marketing and Advertising: Goswick & Associates developed comprehensive marketing and advertising campaigns to promote RTC assets. This included creating and distributing marketing materials, running advertisements in various media outlets, and organizing promotional events to generate interest among potential buyers.
Broker Networks: The company leveraged extensive networks of real estate brokers and agents to widen the reach of RTC asset sales. By partnering with these professionals, Goswick & Associates ensured that RTC properties were marketed to a broader audience, increasing the likelihood of successful transactions.
Auctions and Sales Events: Goswick & Associates organized and conducted auctions and other sales events to facilitate the quick and efficient disposal of RTC assets. These events attracted numerous buyers, creating competitive bidding environments that helped maximize sale prices.
Market Analysis and Valuation: The firm and RTC internal teams utilized market analysis and asset valuation services to accurately price RTC properties. This helped in setting realistic and competitive prices, which in turn attracted serious buyers and expedited the sales process.
Targeted Outreach: Goswick & Associates conducted targeted outreach campaigns to specific buyer segments, including institutional investors, real estate developers, and private investors. By identifying and engaging with the most likely purchasers, Goswick & Associates improved the chances of successful sales.
Promotional Materials: The creation of high-quality promotional materials, such as brochures, property listings, and video tours, helped present RTC assets in the best possible light. This enhanced the appeal of the properties and provided potential buyers with detailed information necessary for making informed decisions.
Customer Service and Support: Goswick & Associates offered customer service and support to potential buyers throughout the sales process. This included providing information via signage, recorded messages answering inquiries, and assisting with the logistics of property inspections and transactions.
By employing these strategies, Goswick & Associates significantly contributed to the efficient marketing and sale of RTC assets, helping to maximize recovery values and reduce the financial burden on taxpayers.
CASE STUDY: THE RTC ERA
The Marketing & Liquidation of over $85 Billion of Real Estate Assets
The establishment and operations of the Resolution Trust Corporation (RTC) during the late 1980s and early 1990s had a profound impact on the American real estate landscape. This period, often referred to as "The RTC Era," saw significant changes and transformations in the real estate market due to the massive liquidation of assets from failed savings and loan institutions. Here are some key aspects of this transformation:
Massive Asset Liquidation
The RTC was tasked with liquidating a vast portfolio of real estate assets, including residential and commercial properties, undeveloped land, and real estate loans. The sheer volume of assets—estimated at around $85 billion in real estate—flooded the market, creating unique opportunities and challenges.
Price Adjustments
The influx of distressed properties led to significant price adjustments in the real estate market. Properties were often sold at discounted prices to expedite the liquidation process. This created opportunities for investors to acquire real estate at lower costs, but it also contributed to a period of price instability.
Market Dynamics and Investor Behavior
The RTC's asset sales attracted a diverse group of buyers, including institutional investors, real estate developers, and private individuals. The availability of undervalued properties encouraged speculative buying and new development projects, reshaping local real estate markets.
Securitization and Financial Innovation
To manage the large volume of real estate loans, the RTC pioneered the use of securitization. By bundling loans into mortgage-backed securities (MBS) and selling them to investors, the RTC introduced financial innovations that would later become standard practice in the real estate finance industry.
Regional Impacts
The impact of the RTC's activities varied by region. Areas with a high concentration of failed S&Ls, such as Texas and California, saw more pronounced effects on their real estate markets. The RTC's asset sales in these regions played a significant role in shaping local real estate trends and recovery trajectories.
Commercial Real Estate Transformation
The commercial real estate sector experienced significant changes as well. The RTC's disposition of office buildings, shopping centers, and other commercial properties contributed to shifts in ownership and management practices. This period also saw a reevaluation of commercial property values and investment strategies.
Urban Development and Redevelopment
In some cases, the RTC's asset sales spurred urban development and redevelopment projects. Investors and developers acquired distressed properties and repurposed them for new uses, contributing to urban revitalization efforts in certain cities.
Long-term Effects on Real Estate Practices
The lessons learned during the RTC era influenced real estate practices and policies in subsequent years. Improved risk management, better regulatory oversight, and more sophisticated investment strategies can all trace their origins to the experiences of the RTC era.
Conclusion
The RTC era was a transformative period for American real estate, characterized by significant market adjustments, financial innovation, and changes in investment behavior. The RTC's efforts to manage and dispose of distressed assets not only helped stabilize the financial system but also left a lasting legacy on the real estate industry. The period serves as a case study in crisis management, market dynamics, and the interplay between government intervention and private sector response.
