At first glance, the two lots for sale at the corner of Northwest Crossing Drive and NW Skyliners Road look like prize property.
The 3 acres have high visibility on well-trafficked streets in an upscale subdivision with some of Bend’s best-known businesses as prospective neighbors. But the owner, West Bend Property Co., the developer of NorthWest Crossing, recently reduced the combined asking price by 18 percent to $1.9 million.
Jay Lyons, a partner in Compass Commercial Real Estate, which listed the lots for sale, said price reductions are not the norm in Bend commercial property just now, but West Bend is “motivated to sell” the lots, he said.
“I wouldn’t say this is indicative of a trend taking place across the market,” Lyons said Thursday.
The market for commercial real estate in Bend is busy, but not every opportunity is what it seems. Raw land, even in desirable locations, comes with development costs.
“I think that that location is particularly challenging,” said Jenn Limoges, a broker with NAI Cascades, a commercial real estate firm in Bend. “If you’re really looking at drawing people into that location, you have to build it first.”
Lyons said the property was effectively off the market about two weeks while the owner negotiated with a prospective buyer that later lost interest. Compass did not actively market those lots during that time but advertised the lots at a reduced price July 27. The two lots have been for sale since August 2016, said David Ford, vice president for real estate development for Brooks Resources, the managing member of West Bend Property.
There’s been virtually no interest in that property, Ford said. Developed properties in the development, on the other hand, are leasing up, he said, citing as example the Shevlin Health & Wellness Center, recently built on NW Shevlin Park Road.
The site on NW Skyliners Road presents challenges, Lyons said. The property slopes from Lolo Drive south to Skyliners Road and it may not be the right size for many users.
The lots are zoned for mixed employment, a designation intended to encourage businesses to locate within walking distance of residential areas. Nearby, Hydro Flask and Ruffwear have their offices, and the commercial heart of NorthWest Crossing is four blocks to the north.
Since publicizing the reduced price, Lyons said, “we’ve had pretty good interest.”
Building costs are high, so developed properties are more attractive acquisition targets, said Lyons and Limoges. A 1031 exchange is one of the most popular areas of commercial real estate in Bend. A 1031 exchange allows a seller to defer taxes on capital gains from a commercial property transaction by using those gains to purchase a similar property.
Lots of prospective buyers are looking for “safe, passive, hands-off properties that don’t require much management responsibility,” Lyons said.
“A property where there are one, two, maybe three tenants with long-term leases,” he said, “and it just kind of cash flows like clock work.”
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