Brasada Ranch For Sale
An article by Jeff Manning in The Oregonian on October 28, made public what many Realtors in Bend and Central Oregon have known for sometime . . . Jeld-Wen has put its collection of destination resorts up for sale. The news shouldn’t be too shocking, especially to readers of this blog (Central Oregon Destination Resorts Face Uncertain Future).
Jeld-Wen to sell Resorts
Following are excerpts from The Oregonian piece:
Jeld-Wen, the Klamath Falls-based window and door maker, has put its portfolio of Northwest destination resorts up for sale.
On the block are some of the best-known resort properties in the region, including Eagle Crest in Redmond and the Running Y Ranch
in Klamath Falls. The company also hopes to sell Brasada Ranch in Powell Butte, RidgeWater Properties next to the Running Y in Klamath Falls, and the Silver Mountain ski resort in Kellogg, Idaho.
Jeld-Wen has already sold its stake in Yarrow, a smaller, upscale housing development in Madras and it still owns a minority stake in Suncadia, a large resort near Roslyn in central Washington.
According to sales literature, Jeld-Wen executives hope to close the sale of its resorts by year’s end.
Why sell?
But it’s unclear why Jeld-Wen would choose to sell these trophy properties, or why it would be in such a hurry to close a deal in one of the worst real estate markets in decades. Jeld-Wen isn’t talking. Company officials declined to return repeated phone calls.
Jeld-Wen is privately held and discloses little about its finances. The company employs about 20,000 with revenues of more than $2 billion.
Company founder Dick Wendt died in August.
It is clear that Jeld-Wen’s exposure to the housing crash is two-fold. It’s core windows and door business rises and falls with residential construction. Its resorts also rely on real estate sales to generate the bulk of their business.
Tom Luersen, executive vice president for Lowe Hospitality Group, oversees operations at Sunriver near Bend and at Suncadia, the resort high in the central Washington Cascades that is co-owned by Lowe and Jeld Wen. Luersen said he’s unfamiliar with Jeld-Wen’s plans. But the fact that a down housing market poses significant challenges for the destination resort business is obvious, he said.
Restaurants, golf courses and hotels create some revenue for these resorts. But the real money is in homes. “These are all real estate resort projects,” Luersen said. “And it’s no secret that Bend is one of the hardest hit markets in the country.”
Together, the Jeld-Wen resorts boast 1,700 single-family and townhome lots.
Jeld-Wen diversified into resort properties in the late 1980s when principals of the company started a time share company called TrendWest. It ultimately sold TrendWest but started developing its own resorts, the first being Eagle Crest, a 1,700-acre golf resort outside of Redmond.
Management reasoned that the resorts could “showcase” their building products. Plus, a vertically integrated development business offered diversification and potential sizable revenue in its own right.
The scale of Jeld-Wen’s investment in these resorts is huge. It spent $25 million just on a water park at Silver Mountain.
Most recently, Jeld-Wen launched Brasada Ranch, an upscale golf community, in 2005.
The resorts reflected the highs and lows of the housing market.
Brasada, too, has been devastated. It enjoyed a spectacular opening selling hundreds of lots in a single day for $200,000 to as high as $500,000. But many of the buyers were speculators, who quickly gave them back to the bank when the market crashed.
Some bank-owned lots at Brasada
now on the market for $80,000, said Cate Cushman, a veteran Bend Realtor. In a resort designed for 750 homes, 31 have been built.
The future?
Jeld-Wen’s plans pose more uncertainty for a community and industry already reeling from the depth of the downturn. But Central Oregon veterans like Cushman argue that in the end, the unique beauty of the high desert
and the Cascades may be Jeld-Wen’s strongest sales angle.
“All the things we feel about Central Oregon, every reason that people want to live and recreate here, are still here,” she said. “We haven’t lost any of that.”
Ironically, the general weakness of the real estate market is helping to slowly build demand in the capital markets for investments in property. Owners don’t want to sell when prices are weak, leading to a dearth of opportunities for money managers seeking investment options.
“There’s a scarcity premium right now,” said John Peterson, president of the Melvin Mark Capital Group in Portland. “There is way more capital eager to buy things than there are sellers.”
Jeld-Wen has hired PKF Capital and Colliers International to handle the sale. In a sales “book” issued to the real estate industry earlier this month, PKF said Jeld-Wen’s resorts generated “three straight years of over $100 million in revenue” from 2005-2007.
More recent sales figures that would reflect the impact of the housing crash are absent from the brochure.
Contact an expert to find out more about opportunities at Brasada Ranch.
