Recoveries on Distressed Real Estate and the Relative Efficiency of Public Versus Private Management
Posted: 26 Feb 2008 Last revised: 21 Mar 2008
This study examines average recoveries from distressed commercial real estate assets held by FSLIC receiverships, and explores differences in the relative efficiency of public versus quasi-private and private entities in the management of these assets. It finds that properties located in markets with rising per capita income and properties that were judged to be less difficult to manage and sell provided higher recoveries, while properties with smaller write downs prior to government takeover provided lower recoveries. The analysis also provides evidence that quasi-government management by the Federal Asset Disposition Agency provided higher mean recoveries, while private management by contractors provided lower mean recoveries than did public management by FSLIC receivership staff.
Keywords: Asset Disposition, Commercial Real Estate, Distressed Real Estate, Deposit Insurance, FADA, FSLIC, S&L
JEL Classification: G20, G21, G28, G31, G33
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