The Shire buyer purchases another Bend development
Firm says it’s optimistic about real estate rebound
Published: July 08. 2009 4:00AM PST
Castle Advisers LLC, a Hood River-based private equity fund that recently purchased The Shire development in Bend, announced Tuesday its purchase of another bank-owned subdivision, the 45-lot Tuscany Pines project in northwest Bend.
The firm paid $2.75 million for the Italian-themed development, which includes a clubhouse and pool, six vacant townhomes and four other townhomes that are near completion.
The development also includes 35 improved lots and a 5.5-acre parcel that’s undeveloped. The whole development covers 11 acres.
Scott Baklenko, co-founder and managing director of Castle Advisers, said the fund has no plans to develop the rest of the property — located along O.B. Riley Road — but will instead immediately list the completed units for sale and then sell the development’s remaining assets over the next five years as Bend’s real estate market rebounds.
The five-year timeline reflects the fund’s carrying capacity for the project, said Baklenko, who believes local real estate is set to rebound soon.
“In my opinion, there are lots of markets in the Northwest still getting worse, but I don’t believe Bend is,” Baklenko said. “I believe it’s flattened — it won’t recover tomorrow — but it won’t get worse as far as real estate pricing (because) we’ve seen stabilization here. We’ve watched closely over the last nine months and have confidence we have invested at the right time for the right assets.”
The fund purchased the development from Umpqua Bank after the development’s original owners — Bend-based Bella Terra Investments Inc. — deeded it back to the bank in December 2008 to avoid a lien, according to county property records.
Bella Terra purchased the development’s property in April 2007 for $11.4 million, according to The Bulletin’s archives.
Scott Wicklund, a commercial real estate broker with the DuBois Wicklund Group in Bend, said investors are “testing the waters,” especially those that can afford to take advantage of low purchase prices and hold the development properties until market demand returns.
“People are starting to sense it’s near the bottom, that these opportunities are pretty good right now,” Wicklund said. “We’re at a point where I don’t know how much lower it can get.”
Castle Advisers purchased the 15-lot Shire property from Umpqua Bank in May for $750,000. The development, patterned after J.R.R. Tolkien’s “Lord of the Rings” series, was purchased in December 2004 for $3.4 million, according to The Bulletin’s archives.
Baklenko said the development has been rebranded as Forest Creek and that the fund also plans to sell off the lots as the economy rebounds.
Baklenko, a financial adviser who also successfully organized Hood River’s CenterPointe Community Bank in 2007, said his equity fund has investors from around the country and very few in Hood River. He said the fund tracks anywhere from 15 to 20 different investment opportunities at a time and moves in when it sees “investable opportunities” in a market.
“We look at markets throughout the West Coast, and Bend is certainly a market we believe in long term,” Baklenko said. “It’s an incredible town that’s gone through a little bit of a real estate correction, but long term this town is no different than it was five years ago, a place people want to be.”
Baklenko declined to comment when asked if the fund was interested in purchasing other developments in Central Oregon.
Andrew Moore can be reached at 541-617-7820 or at amoore@bendbulletin.com.
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