Type of Submission

Refereed Article


This paper compares appraised hotel values of Resolution Trust Corporation (RTC) properties in the American Southwest ("Oil Patch" states) with their respective market values. The RTC was given the task of having hotel properties appraised and subsequently auctioned for sale. However, RTC officials were aware they had limited time and funding for their operations. Consequently, RTC officials faced a significant amount of political pressure to sell non-performing assets quickly, particularly in the Oil Patch where banking problems were especially severe. Given these circumstances, the RTC may have been motivated to influence appraised hotel values downward to sell more assets faster. The results of this paper indicate appraised hotel values to be lower than their market values in the region. Moreover, the differences between appraised values and market values were significantly more negative in the Oil Patch than in other regions.