Investors buy foreclosed Woodland land for homes

Investors buy foreclosed Woodland land for homes

A Bay Area group of investors has purchased 110 acres of future home lots in Woodland.

The foreclosed land, a remnant of the old Reynen & Bardis Communities empire, went for about $3 million, according to some real estate professionals. In 2005 the same property sold for nearly $30 million.

The unimproved land, known as Parlin Ranch, is within the Spring Lake Specific Plan. Approved for 615 homes, Parlin Ranch was once owned by Reynen & Bardis, Sacramento homebuilders and developers whose principals declared personal bankruptcy in 2008.

The land sale doesn’t indicate a major turnaround of the new-home market, real estate observers said. Instead, it came about because the seller — OneWest Bank — got more realistic about a sales price and the buyer was willing to invest in the property until the market rebounds enough for the investors to re-sell the land.

“It’s not happy days are here again,” said Steve Thurtle, a local real estate investment adviser. Although not involved in this deal, Thurtle has done deals with the Sacramento office of Land Advisors Organization , which handled the transaction.

The Parlin Ranch sale is one of the largest land transactions in Woodland — based on number of future home lots — since the housing market went bust, said Ryan Long, part of the team that represented the buyer and seller in the transaction. Long is with the California division of Land Advisors, which has been marketing the property since February 2011. Long handled the deal along with Jim Radler and R.J. Radler, also of Land Advisors.

Under the deal, which closed May 10, Village Properties VPI Inc. paid an undisclosed amount of cash for the property, located at the eastern side of County Road 101 along the northern side of East Gibson Road. The land, which went for nearly $30 million in 2005, before the market tanked, was offered for around $10 million a few years ago.

Village Properties is a small, private company made up of a half dozen investors who dabble in land, industrial, apartments and retail real estate.

“They’re smart guys,” Thurtle said. “For the right buyer, it made a lot of sense.”

“They’re not an end user. They’re strictly an investor,” said Long, speaking on behalf of Village Properties.The investment group will sit on the land until the market rebounds, he said.

The investors realize that Woodland has very few ready-to-build, finished lots — perhaps around 100, Long said. Elk Grove, in comparison, has about five times that many. At the peak of the market, Woodland probably had 300 such lots at any given moment.

Two main homebuilders are active in the Spring Lake area — Standard Pacific Corp. and Centex, which is a brand of PulteGroup. Some 4,000 homes are slated to be built on 665 acres within the Spring Lake Specific Plan. Several hundred houses have been built so far. Some parts of Spring Lake still need plans approved before building.

The seller of Parlin Ranch is a limited liability corporation set up by the lender. The original lender with the claim on the property was Indymac Bank, but it became the first major savings and loan victim of the financial crisis. OneWest Bank bought Indymac from the federal government and foreclosed on Parlin Ranch in 2010.

“The banks still have no interest in real estate,” Thurtle said.

Large banks held onto their foreclosed properties waiting for a recovery, he said. Now some banks think this is the most optimism they’re going to get from the few people looking to buy large chunks of land. And sellers are becoming more realistic.

Parlin Ranch received bids from five groups of developers and investors, Long said.

“We think things are turning the corner and definitely getting better,” Long said. But it will be a “slow process to get out of it from here.”

Sacramento Business Journal
Kelly Johnson, Staff Writer and Social-Media Strategist