Friday, November 29, 2013

Bubble, Bubble?...Toil and Trouble...



With apologies to Shakespeare. (the actual phrase from Macbeth is “double, double..” etc.)
There’s  a lot of bubble talk these days, mostly in the direction of the stock market. Instead of a brew of eyes of newt, frog toes and other unsavory ingredients,  market  witchers (couldn’t resist) are running the numbers and letters for an alphabet soup of stock forecasts.
Some say the sky could be falling. But other analysts believe there’s more on the upside, even after the S&P 500 Index and Dow Jones Industrial Average reached all-time highs earlier in November.
It’s been a remarkable runup by the two major indexes and also many individual stocks since late 2008-early 2009 when equities led the housing recession in a freefall.
 Since March of 2009 the S&P 500 has increased by nearly 165% and the DJIA by 137%. Over the past year the indexes have risen nearly 28% and 23%, respectively.
Now that real estate--residential and investment-- is recovering around the country, there’s a logical question on the minds of many, i. e.,“Will jittery investors move more assets out of stocks and into real estate?”
A recent CNBC report supports the scenario of an exodus from stocks to real estate and other investments.
The report cites the Spectrum Group “Millionaire Investor Confidence Index” which recovered slightly in November after a precipitous decline in October.
According to CNBC’s report, millionaire households had the largest increase in assets for a single November since 2007, as the result of the continued climb of the stock market.
Millionaires planning to invest in stock mutual funds declined by 5%, CNBC reported, but those considering real estate or cash equivalents increased by 7%.

Wednesday, November 20, 2013

Get out the boards...layer the fleece!


         Powdr Corp., owner and operator of Mt. Bachelor, says it will make a decision soon on opening of the 9,000-foot ski mountain. Several storms crossing the Cascades along with colder weather have given a boost to the mountain snowpack this week. As of early Wednesday morning, Nov. 20, the mountain web site was reporting 27 inches of snow for the past 7 days, including 7" in the past 24 hours.


Nordic Lodge
Base of Pine Marten lift



                                      










Mid-Mountain
Snowfall measured at 7,300' near the top of the Sunrise Express lift


Since 3 p.m. Yesterday
13"
24 Hour
Snowfall
7"
3 Day
Snowfall
16"
7 Day
Snowfall
27"

Snowfall
Since Oct. 1
65"

Snow
Depth
21"

West Village Base
Snowfall measured at 6,300' near the bottom of the Sunshine Accelerator lift

Since 3 p.m. Yesterday
3"
24 Hour
Snowfall
6"
3 Day
Snowfall
13"
7 Day
Snowfall
21"

Snowfall
Since Oct. 1
46"

Snow
Depth
20"

Tuesday, November 5, 2013

Running Y Ranch resort on the market block



            The Running Y Ranch in Klamath Falls, one of three Oregon resorts acquired from window and doormaker Jeld-Wen in 2010, is now up for sale.
            CBRE Hotel group in Seattle is the broker for Northview Hotel Group, which also acquired Brasada Ranch in Powell Butte and Eagle Crest in Redmond concurrently with Running Y in late 2010 for an undisclosed price.
            Northview is backed by Oaktree Capital Management, headquartered in Los Angeles with offices in Europe, Asia, and the Middle East.
            Among a wide range of investments, Oaktree specializes in acquiring real estate debt intended to generate current income without controlling the underlying asset. Current information on the company web site notes a real estate portofolio valued at $244 million.
            Northview’s corporate profile says  that since 2004 the company has acquired more than $700 million in hospitality industry properties. In addition to the Oregon properties, the company now owns resorts in North and South Carolina and Florida, as well as a California hotel and others on the East Coast.
            Seattle brokerage CBRE’s offering brochure does not provide a price for the 3,600-acre Running Y, located  in an area along Klamath Lake.
            The assets in the offering include:

·        An 88 room lodge and conference center, which underwent a $3 million renovation in 2011, according to the offering.
·        51 sale-ready  lots and another 57 potential lots to make site ready  by a new owner
·        18-hole Arnold Palmer signature golf course
·        A utility company with 350 connections
·        The HOA management company with six separate associations

The offering brochure says the resort experienced “solid” and “accelerating” gross income that increased to $5.91 million in 2012, a 24% increase over the previous year, yielding net from operations of $260,635. Lodging occupancy was up more than 47% with room rates averaging nearly $96.
There was also “stable,” but not disclosed operating income  from the utility and HOA, which manages 1,149 custom homes and townhomes, the offering noted.
Northview is offering the resort “unencumbered” by debt or existing management. The hotel can also be acquired without brand affiliation, which is  now with IHG International’s Holiday Inn Resort group.

Friday, November 1, 2013

Metolian resort development rights transfer debated



            “Every legislative session I’ve been in, there’s been a ‘one-off’ with land use,” .... “Like Nike....we do special things sometimes, don’t we?”
            As quoted in the Nugget newspaper of Sisters, state Rep. John Huffman’s (R-The Dalles) honest comment focused on the legislative loopholes and political give-and-take in Oregon’s 1970s land use law.
            In this case Huffman was referring to objections raised in a Sisters public meeting Aug. 29  to legislation related to the “ transfer of development opportunity” (TDO) rights that emerged after earlier legislation ended plans to build the Metolian, a planned “eco-resort” in the Metolius River Basin near Camp Sherman.
            Shane Lundgren of Camp Sherman, the original Metolian developer, has been working to find an appropriate location to exercise his state-granted TDO to build another resort.
            The original TDO legislation was enacted after Lundgren’s Metolian proposal was denied when the legislature voted to establish the Metolius Basin location as an Area of Critical State Concern, effectively ending any future plans to build resorts in the basin.
            Also affected by the land use designation was a proposal by Ponderosa Land & Cattle Co. to build a resort--that could have included a golf course--in the Green Ridge area above the Metolius River. However, Ponderosa retained the right to build a limited number of homes on larger parcels in the area.
            Jefferson County had included the proposed Metolian location in mapping areas for potential resort development, as required by the state land use law.
But the special legislation overruled  the county by designating the Area of Critical State Concern.
            The legislation prohibiting the resort and subsequent TDO legislation have both been cited as examples of how the state land use law can be manipulated--by interests on both sides of a development issue.
            The TDO legislation, HB 3313, would allow Lungren to build on land not currently designated for potential resorts in economically depressed counties with chronic high employment.
            In the Aug. 29 Sisters meeting the focus of the discussion was the possibility that the TDOs could be transferred for expansion of the existing Aspen Lakes golf community east of Sisters on Hwy 126.
            The plan could allow about 480 homes, along with nightly lodging and additional recreational facilities,  to be built on 640 acres of Cyrus family land along Camp Polk Road. There are also reportedly five other possible sites considered  by the Lundgren group.
            Previously unsuccessful proposed legislation, unrelated to the current TDO issue, would have allowed Aspen Lakes to expand under designation as a  “Cyrus Heritage Farm.”
            In additional meetings in the Sisters area the discussion has moved from specific legislation to allow TDOs to be exercised at Aspen Lakes to expanding the counties in which they could be used, including Deschutes and Jefferson, the latter in which the original Metolian Resort was proposed.
            Huffman has been sponsoring the public “work group” meetings with participation of state agencies including the Oregon Department of Land Conservation and Develop, Oregon Water Resources Department and Oregon Department of Fish and Wildlife.
            As quoted recently in the Bend Bulletin, Huffman said he is not anticipating new legislation that would specifically designate the Cyrus property or other land for resort development. Instead he has now said any bill be intended to include Deschutes and Jefferson among possible county locations.
            Additional meetings on the TDO issue are expected in November.