Have $8 million? You can buy Medford's Bella Vista

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The bank-owned Bella Vista subdivision off Medford’s McAndrews Road is being offered for sale for $8 million. Bob Pennell / Mail Tribune photoBob Pennell

September 09, 2009

By Greg Stiles

Mail Tribune

Bella Vista Heights, an upscale subdivision overlooking east Medford, is now available at a bargain rate.

All 107 lots, including one parcel overlooking Roxy Ann Vineyards once priced at more than $400,000 by itself, are being marketed in bulk for $8 million.

The development on McAndrews Road, conceived by Arthur Dubs and then launched by a group led by Jeff Chamberlain, ran smack into the economic downturn that saw the Medford real estate market fall from among the hottest in the Northwest to the doldrums.

In January 2006, Excelsior Development Co. paid Dubs $13.835 million for the 38.5 acres, with lots ranging from two-tenths to two-thirds of an acre. Roads, lights and even a large waterfall at the entrance were built, and presale reservations were going well, said Stacey Boals, who was in charge of marketing the subdivision. Street of Dreams houses were in the works.

"What we expected it to become was the finest neighborhood in Medford," said Boals, now the chief executive officer at Keller Williams Realty in Medford.

"The uniqueness of that hilltop abutting the vineyard, the larger lots near the top — there were some magnificent views."

Then the bottom fell out of the real estate market, nationally and locally, where values have dropped more than a third from the 2006 peak.

The property was foreclosed on last year and acquired by Bend-based lender Bank of the Cascades in December for $7.9 million at a sheriff's auction.

Bank of the Cascades signed Oregon Opportunities commercial real estate agents Tom Harrison, Curt Johnson and Ken Reeder to market the property and a sign was posted a few days ago.

"We've done this sort of thing before," Johnson said. "When it became apparent they were going this direction, we were anxious to help."

It boiled down to bad timing, Johnson said.

"I'm sure everyone has lost something in the process; who ranks at the top, I'm not sure," Johnson said.

At $8 million total, the cost per lot works out to about $75,000, Johnson said.

"Obviously, real estate will cycle back," he said. "Instead of looking at a number of years' supply of land, we'll be looking at a number of months. But when that will be, we don't know."

Johnson said the bulk buyer might retool the development plan and then sell off the northern portion that falls below McAndrews Road.

There already has been what Johnson termed "a fair amount of inquiry" from both local and outside parties.

"It surprises me, but maybe it shouldn't," Johnson admitted. "Maybe it's because of its visibility. It's still early on, so it's hard to say. Some of it is just passing interest, but some is from people with the ability to do something if they want to; but who knows if they want to."

He said that if market conditions improve, the property will immediately become attractive.

"When a proposal happens, things can happen real fast," Johnson said. "What takes time is the due diligence to figure things out pertinent to the project."

Just as Excelsior paid a premium for the advance work Dubs has done, a new buyer will pay a premium — even in a lesser market — based on the infrastructure already in place.

"In a regular market, the price would be hugely attractive," Boals said. "All infrastructure is there: The roads, lights, pipes, power, the rock walls, the water fall, everything."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.

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