Multifamily properties sell quickly in Bend

Putting a rental complex of townhomes or apartments in Bend on the market is a sure way to attract attention, said a real estate broker who’s sold several in the last four months.

Ron Ross, of Compass Commercial Real Estate Services, said a purchase offer was tentatively accepted Monday for a 24-unit complex on SE Skylark Drive, in Bend. He declined to identify the buyer or state the selling price, but the property was listed at $2.4 million. It’s the third transaction involving multifamily rental property that Ross has been part of since April. Another Compass broker sold a fourth, a 12-unit multifamily complex on NW Knoxville Boulevard, for $1.6 million in April.

“Multifamily properties are in high demand for investment. There are not a lot of them, although more of them have come on the market this year than the past few years,” Ross said Wednesday. “But there’s still a pretty scarce supply.”

A search on LoopNet, a website that lists commercial property, found the Skylark property the one sizable complex listed for sale; and five other complexes of seven units or less each are also listed. Ross said the Skylark property and another on NE Holliday Avenue that sold in June were sold a week after they were listed.

Owners who sell their multifamily rental properties now may see a sizable return on the sales if they bought when prices were lower.

On the other hand, buyers want a return on their investments, Ross said, and the remedy often is to raise rents.

Even with property prices climbing, investing in real estate is popular now because it pays a return. With interest rates near record lows, banks pay little interest on savings. Likewise, 10-year Treasury bonds are paying 1.5 percent interest.

“There’s a lot of money on the sidelines right now seeking a return, and there are not many places to get a return,” Ross said. “And Bend is hot; a lot of people want to invest in Bend.”

David and Ellen Webb, of Sisters, are two. In June, they purchased the 12-unit townhome rental complex at 2320 NE Holliday Ave. for $1.7 million. They used the proceeds from a previous property sale to make the purchase, money they wanted to invest, said Ellen Webb.

“We’d been wanting to do it and decided if we were going to do it, we should do it or get priced out in the next couple years,” she said.

All but one of the units were occupied when the Webbs took ownership, she said. They are spending on new paint, touching up the landscaping and renovating the interiors, particularly the outdated kitchens.

Ellen Webb said the previous owner charged lower-than-market rates. The spring survey by the Central Oregon Rental Owners Association found the average rent of $972 per month for a two-bedroom duplex and $1,136 for a two-bedroom home in Bend. Webb said she and her husband worked with a property management company and brought rents to current market value. The rates they charge will help cover the cost of renovations, she said, although she declined to specify them. The Holliday Park townhomes are two-story, two-bedroom units with 2½ baths of about 1,300 square feet.

“This could turn out to be a horrible idea in the long run,” Webb said. “It seems real estate does hold its value compared to the money market or stock market, which is so volatile.”

— Reporter: 541-617-7815, jditzler@bendbulletin.com


Source: BB Real Estate – topStory

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