Low price on Santa Rosa units helps investor-entrepreneurs take bet on second career
SANTA ROSA — Half the 28 retail condominiums in a large southwest Santa Rosa mixed-use development sold to two businessmen who plan to start a bakery in four of the corner spaces at the community entrance.
Doug Quick and Tony Tam and their Big Production LLC website development business purchased 14 condos in the west building fronting on Sebastopol Road from Westamerica Bank on June 19 for $340,000, or about $34 a square foot for the 9,900 square feet of space. The retail condos are in Village Square at Courtside Village, which has 28 street-level commercial condos and 54 upstairs residential condos, is part of the Courtside Village master plan, which also includes 200 adjacent condos, called Park Lane Villas.
After 16 years of making websites, they said they want to transition into baked goods full-time.
“We’re looking for a second career,” Mr. Quick said. “It’s something we both have a passion for.”
Drawing on years of catering parties for friends and themselves and taking advantage of Arizona’s cottage industry law to test-market recipes in the Scottsdale area, they are moving back to Santa Rosa to start East Wind Bakery over the next six months.
The rest of 400-to-1,000-square-foot retail condos will be leased. Prospects include a hair salon and a restaurant.
Buying commercial space at such a low price was less risky for the startup bakery than renting, Mr. Quick said.
The units have been in the same vacant, shell condition since the development was completed in 2007. ”It gives buyers flexibility, but it’s one of the reasons why they sold for so few dollars,” said Jeffrey Wilmore, who has been marketing the properties for the bank with fellow Keegan & Coppin agent Ken Bizzell.
The big reason for why the commercial units haven’t sold until now has been a legal battle between lenders and project developer. Westamerica Bank in December 2010 foreclosed on project loans it picked up through the acquisition of Sonoma Valley Bank.
Part of the battle has been carving up the development property owners association because of an ebb in dues during the developer’s bankruptcy proceedings, according to Mr. Wilmore.
Creation of the new Village Square at Courtside Village owners association was officially completed earlier this year, according to public records.
Westamerica sold the 27 upstairs residential condos in the west building earlier this month for $2.4 million, or $88,000 a unit, according to listing broker Randy Waller of W Real Estate. The buyer, Novato-based Shipsey Development, which owns and manages commercial and residential properties in Oregon, California and Texas, plans to rent the 800-to-1,000-square-foot units for $1,100 to $1,300 a month.
Sale prices for the two-bedroom, one-bathroom units in the development reached $400,000 before the local housing market collapsed, he said. Now such condos are selling for $129,000 to $139,000.
Though the inventory of Sonoma County homes has tightened to 1.8 months — anything less than six months is considered a seller’s market — and interest rates remain very low, older houses are tending to sell for more than the compact single-family and dense condo projects built in the Santa Rosa area from 2004 through 2007, according to Mr. Waller.
“When people are more discerning, they are willing to buy older houses where they want to live versus newer comes on small lots with quad driveways in back,” he said.
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