The bidding war has started.
Real estate brokers nationwide are teaming up with auctioneers to offer sellers one more incentive for signing with them. And real estate auctioneers are trying to take their image beyond the courthouse steps by planning more upscale sales to the public.
Everybody wants to claim a part of the more than 30,000 properties that are to be sold through the Resolution Trust Corp., the agency charged with liquidating assets of defunct thrift institutions.
The numbers are staggering. Properties for sale on the RTC's latest list fill 3,000 pages in nearly four volumes.
And there's something for everyone: A country club with no golf course, a shopping center with no street access and Texas condos without air conditioning.
Serious buyers, however, may have an unparalleled opportunity to benefit where others have lost.
Auctions play a big part in the RTC plans to get all these properties off its books and back in the private sector. That's where brokers and auctioneers see an opportunity for themselves.
Real estate brokers such as Grubb & Ellis, Cushman & Wakefield and Coldwell Banker already have divisions set up to capitalize on the opportunity. Several other companies are studying the matter, and so is just about everyone else in the commercial scene.
Grubb & Ellis Co. is planning to launch its joint venture with auctioneer Ross Dove Co. by offering $100 million in properties at an auction set for late spring in Los Angeles.
For now, the companies' strategy is to persuade troubled lenders to let them sell their real estate portfolio before the feds move in and do it for them. At the same time, Grubb & Ellis Asset Services is lobbying to become a major contractor for RTC property sales.
California will prove especially fertile ground.
Besides being the home to more than $4 billion in repossessed S&L assets, California also has a large number of potential buyers. About 60% of distressed properties in Arizona, said Foster City-based auctioneer Ross Dove, are bought by Southern California investors.
Grubb & Ellis plans to assign each auction property to a broker and at the same time, try to market it conventionally. Since every auction generates thousands of inquiries, the company will turn those over to brokers, too--creating a new pool of business prospects.
