The troubled housing market claimed yet another victim late last week. Danville, Calif.-based The Ryness Company, a third-party sales and marketing services and market data firm, filed for Chapter 11 bankruptcy protection Friday in the U. S. Bankruptcy Court, Northern District of California.
Company information indicated that since its inception in 1975, it has sold roughly 150,000 homes in more than 2,000 new-home communities. However, how much market clout the company wielded in more recent years is still up for debate. Some sources have said that at its peak, the company was responsible for as many as 10,000 new-home sales, while others have maintained that the figures were little more than one-tenth of that.
But all market share debate aside, the company was a well-known name in the industry, earning 300+ awards for sales and marketing from the NAHB and its regional affiliates.
"If you went to any industry event, you would get instant recognition [of the Ryness name]," said Ericca Ciochetti, a regional manager for Northern California with Hanley Wood Market Intelligence.
According to court documents, the company has between 200 and 999 creditors and estimated assets of between $1 million and $10 million, compared to liabilities of between $10 million and $50 million.
Topping the list of the company's top 20 unsecured creditors is Adrienne Albert, a New York City-based residential sales and marketing maven and founder of The Marketing Directors, who is owed roughly $5.5 million. Ryness teamed up with Albert and Atlanta associate David Tufts in 2006; the partnership intended to give the company an East Coast complement to its Western roots.
Big Builder's parent corporation Hanley Wood also is listed as an unsecured creditor, according to court documents.
To blame for the company's current conditions are a variety of factors, not the least of which are steep drop-offs in new-home sales levels in the company's core markets.
"We're not surprised they're going through this because it has been a difficult year," said Steve Kaller, CEO of Ultimate New Home Sales and Marketing, a Ryness competitor in California. "You have to get people through the fear of buying, and then there are financing issues. Getting financing for anything that's a jumbo is tough."
However, other sources familiar with the company point to some untimely acquisitions and business partnerships. In 2004, the company expanded into Arizona, Nevada, and the Pacific Northwest. A year later, the company launched Sullivan Group Real Estate Advisors, a national market research and advisory firm. And then in 2006 came the acquisition of The Marketing Directors.
But of late, many of the partnerships have crumbled. Sources at the Sullivan Group have stated that the two firms parted ways two years ago. And other local sources stated that the parent corporation has turned some regional operations, particularly in California, back over to the original owners. Not to mention growing strains with key financial sources, leading to legal issues in 2008.
However, some of Ryness' builder clients appear to be unfrazzled by the news of the company's bankruptcy. One company's Northern California group that uses Ryness for its sales staffing, indicated that it has been business as usual since the filing. In fact, management indicated that because many of the issues stem from the company's East Coast acquisition of The Marketing Directors, it expected little fallout in California. Management also added that that it is pleased with its relationship with the Ryness team and looks forward to continuing to do business with them.
Gary Ryness, company founder and president, could not be reached for comment at press time. The industry has widely regarded Ryness as a sales and marketing expert. His leadership in the industry includes, but is not limited to, serving as an advisory board member for the University of Southern California's Lusk Center for Real Estate, founding trustee of the national Builder Marketing Society, recipient of the Northern California home builder association's sales and marketing council's Lifetime Legend Award, and a 2002 inductee into the California Building Industry Hall of Fame.