IN THIS ISSUE

Q1 Market Summary

2 Bend office market

3 Bend retail market

4 Bend & Redmond industrial markets

Compass News

5 Compass Commercial is pleased to introduce new members of

our team

Top Producers

La Rosa joins Brookswood

Meadow Plaza

6 Nonprofit Spotlight: Volunteer Connect

7 Top 10 deals

Marketing news

Cover story continued

8 Opportunity is knocking

While Compass Commercial focuses primarily on commercial real estate, it is useful and instructive to examine residential real estate trends and statistics. Residential trends are more clearly defined, and more easily measured and quantified. In Central Oregon, many segments of the commercial market are thinly traded making it more difficult to track and extract meaningful data. Another good reason for this exercise is that commercial real estate trends have a high correlation with, and indeed in Central Oregon, a strong dependence on the residential market. Past history suggests that in Central Oregon, commercial real estate will lag residential trends by approximately 6 to 18 months.

So, what is happening in the residential real estate world? It is helpful to step back and take a long term perspective. The following chart speaks volumes. It tracks the average price for a Bend home from 1986 through 2011. Recall that 1986 was when Central Oregon was emerging from the last Great Recession of the early 80’s. I can tell you that it was a tough time, as I started my own career in real estate brokerage in Bend in 1981. Mortgage interest rates were 18%. I am often asked if today’s recession is worse than the 1980’s. I remember pontificating

Opportunity is knockingBy Ron Ross, CCIM

during the boom years that I knew the boom would not last forever, but that I was confident that things would never again be as bad as the 80’s. After all, Bend had matured out of the boom/bust cycle. Oops, I was wrong. This recession has been as bad, if not worse.

What does this chart tell us? The first thing that jumps out is that the annual average home price appreciation rate from 1986 through 2011 is 6.1%, including the implosion of the last few years. What is wrong with that? That seems like a very healthy market. What went wrong?

What went wrong is that very ugly lump on the chart from years 2001 to 2007. That is what a “bubble” looks like on a chart, an irrational, unhealthy and unsustainable spike in real estate values. Markets

Continued on page 8

AVERAGE BEND HOME PRICES

6.1% Annual Rate of Appreciation

2 Compass points I Q1 2012 Compass points I Q1 2012 3

NET ABSORPTION BY SUBMARKET — 1ST QUARTER 2012

MARKET AREANO. OF BLDGS.

TOTALSQ. FT.

VAC %1ST QTR.

1ST QTR. ABSORPTION

ABSORPTION YTD TOTAL 2011

South 97 19 828,670 16.4% 5,960 5,960 16,912

Central 97 40 667,211 6.8% (6,673) (6,673) 29,558

North 97 26 1,121,460 4.9% (10,614) (10,614) (7,472)

East side 29 589,840 10.5% 6,646 6,646 (1,466)

West side 54 560,394 10.0% (6,413) (6,413) 20,523

Old Mill Shops 16 221,909 4.0% (1,093) (1,093) (4,483)

Downtown 65 424,617 7.8% (13,502) (13,502) 8,621

BEND TOTAL 249 4,414,101 9.0% (25,689) (25,689) 62,193

LEASE: Retail or office space in Black Bear SquareOn Bus. Hwy 97 in Redmond, high traffic counts

ROBERT RAIMONDI OR PETER MAY: 541.383.2444

LEASE: Former Liberty Bank branch4,961 SF turn-key bank building in Redmond

STEVE TOOMEY OR RON ROSS: 541.383.2444

LEASE: Pinebrook Plaza retail spacesOn 3rd St. and Hwy 97, anchored by Albertson’s

ROBERT RAIMONDI OR PETER MAY: 541.383.2444

LEASE: Downtown Beck Bakery buildingOffice and retail space for lease in downtown Bend

MARLO DEVIR: 541.383.2444

Compass Commercial Real Estate Services is a full-service commercial real estate firm with expertise in all aspects of the business. Compass Points is published to inform our clients, partners and colleagues of trends, activity and opportunities in the Central Oregon commercial real estate and business markets.

Compass Points is published quarterly by Compass Commercial Real Estate Services, 600 SW Columbia Street, Suite 6100, Bend, Oregon 97702. (541) 383-2444. Subscription is free via sign-up on our website, www.compasscommercial.com. All material in Compass Points is copyrighted, unless otherwise noted.© Compass Commercial, Inc. 2012.

PARTNERS:Howard Friedman, CCIM, Principal BrokerCheryl Gardner, Principal BrokerJohn Keba, CPM, ARM, Principal BrokerBruce Kemp, CCIM, Principal BrokerDarren Powderly, CCIM, PresidentErich Schultz, SIOR, Principal BrokerStephen Toomey, CCIM, Principal BrokerGardner Williams, SIOR, Principal BrokerLupita Wesseler, Office Manager

BROKERS: Russell Huntamer, BrokerDan Kemp, BrokerPat Kesgard, CCIM, Principal BrokerPeter May, CCIM, Business BrokerJay Lyons, CCIMRobert Raimondi, BrokerRon Ross, CCIM, Principal BrokerMarlo Devir, Broker

PROPERTY MANAGEMENT:Herb Arathoon, CPM, BrokerShauna Browne, Administrative AssistantTina Castillo, Operations ManagerTara Duncan, CCIM, BrokerCheryl Gardner, Principal BrokerJohn Keba, CPM, ARM, Principal BrokerStacy Olsufka, Property Manager

DEVELOPMENT SERVICESSteve Hendley, Development Services Manager

BUSINESS SALES & ACQUISITIONSBROKER SERVICES:Robin Locher, Creative AssistantSandi Mickel, Administrative AssistantLisa Nielsen, Creative DirectorJennifer Ortado, Marketing ManagerLupita Wesseler, Office Manager

Analysis and editorial by the management, staff and associatesof Compass Commercial Real Estate Services.

www.compasscommercial.com I info@compasscommercial.com

Compass Newsroom Follow Us on Twitter Facebook Updates

Compass surveyed 196 buildings for the first quarter 2012 office survey. The buildings in the sample totaled 2,353,895 square feet. The citywide office

vacancy rate started at 21.2% at the beginning of 2012, and rose slightly to 21.6% at the end of the first quarter 2012. The survey results show that 508,388 sq. ft. of space is now available for lease.

This quarter, 8,866 sq. ft. of negative absorption took place, compared to 4,699

Bend Office Market

MARKET AREANO. OF BLDGS.

TOTALSQ. FT.

VAC %1ST QTR.

1ST QTR. ABSORPTION

ABSORPTION YTD TOTAL 2011

Downtown 47 473,779 15.9% 7,892 7,892 (22,973)

Hwy 97/3rd St. 55 629,613 26.8% (7,125) (7,125) 16,427

West side 94 1,250,503 21.1% (9,633) (9,633) 31,322

BEND TOTAL 196 2,353,895 21.6% (8,866) (8,866) 24,776

NET ABSORPTION BY SUBMARKET — 1ST QUARTER 2012

Office buildings over 3,000 square feet

sq. ft. of negative absorption in the previous quarter and 503 sq. ft. of positive absorption in the first quarter of 2011.

Downtown submarket

Compass surveyed 47 downtown office buildings totaling 473,779 sq. ft. for this quarter’s survey. The downtown office vacancy rate fell to 15.9%, compared to 17.3% at the end of Q4 2011, due to a number of smaller lease transactions, with the largest being the lease-up of the 4,040 sq. ft. Eagles Building on Greenwood Ave. Several vacancies of around 1,000 sq. ft.

Bend Retail MarketThe Old Mill submarket reported one loss of just over 1,000 sq. ft. and continues to have the lowest vacancy rate in the city at a healthy 4.0%.

Other notable transactions include the former 4,857 sq. ft. Shanghai Restaurant on N.E. Division Street that was leased by Carlos Reyes, of Reyes Tortilleria on S. Division St., who plans to open a Mexican restaurant and lounge soon. And another long-time favorite Mexican eatery, La Rosa, will be expanding into the Brookswood Meadow Plaza in the fall. Joining La Rosa in the center is Local Slice, an Italian food and pizza store that opened in late April by David Touvell of Chow fame.

On the retail sales front, the 3,616 sq. ft. building on the corner of N.E. 3rd St. and Franklin Ave., that was most recently the Bella Cucina restaurant, (but for long-time Bendites, known as the Mexicali Rose building) sold in February for an adjusted price of $593,000 and will house a new branch of Central Oregon Audiology after an extensive remodel. And, as previously mentioned, Bob Mitchell of Mitchell Hardware, Inc. purchased the future Ace Hardware building for $640,000 and plans to open Bend’s third Ace store soon. And finally, the former Vogt Chevron site on N. Hwy 97 sold for $475,000 to Jeffrey Southwick, who will be operating his Brakes for Less business in the 1,860 sq. ft. building that sits on .55 acres.

Compass surveyed 249 retail buildings totaling over 4,414,000 square feet for the 2012 first-quarter retail survey. The three-month period’s vacancy rose for the first

time in a year to a rate of 9.0% compared with 8.2% for the fourth quarter 2011 and 9.9% against the first quarter of 2011.

The market lost 25,689 sq. ft. in Q1 after gaining 14,756 sq. ft. in the previous quarter and a total of 62,193 sq. ft. for all of 2011. However, indications that the retail market is on a slow recovery are still evident, now having seen positive gains in six out of the last eight quarters.

Just two of the seven retail market areas surveyed experienced positive absorption over the quarter, while five lost ground. The South Highway 97 and Eastside submarkets showed a combined absorption of just over 12,600 sq. ft., led by Ace Hardware’s announcement that they will be moving into a 7,000 sq. ft. store at Mt. Bachelor Plaza on S. 3rd Street.

The remaining submarkets lost over 38,000 sq. ft. of occupancy; most notably the Downtown submarket, which reported over 13,000 sq. ft. of new vacancies, in among other locations, the Bend Mapping and Penney Galleria buildings. However, downtown still shows a vacancy of only 7.8%, compared to the South Hwy 97’s statistically weakest percentage of 16.4% vacancy.

SELECT RETAIL LISTINGS

were reported, resulting in a net gain of 7,892 sq. ft. of positive absorption.

Hwy 97/3rD street submarket

The Hwy 97/3rd Street corridor lost ground slightly, recording 7,125 sq. ft. of negative net absorption in Q1 with eight properties showing vacancy losses and five showing gains. Empire Corporate Park was the biggest loser, recording 3,515 sq. ft. of negative net absorption, while Red Oak Square reported the best gain of 2,420 sq. ft. Consequently, the vacancy rate rose to 26.8% from a Q4 2011 finish of 25.7% out of the 55 buildings surveyed.

west siDe submarket

The west side submarket again showed the greatest losses in Q1, with a number of new vacancies reported in the 1,000 – 3,000 sq. ft. range. Overall, there were nine buildings reporting net losses and eight reporting net gains. In total, the west side saw another 9,633 sq. ft. of negative net absorption, following a dismal Q4 2011 that reported 22,409 sq. ft. of new vacancies. Due to the new vacancies, the rate rose from 20.4% to 21.1% out of the 94 buildings surveyed.

Several sales took place in Q1 2012. Most notably was the purchase of the 4,424 sq. ft. former Wells Fargo building on the corner of Colorado Avenue and Industrial Way for $775,000, or $175 per sq. ft., which was purchased by a Newport Beach, California property management company.

LEASE: Medical clinic in downtown Bend1,372 SF office just off Bond St. w/ample parking

ERICH SCHULTZ OR DARREN POWDERLY: 541.383.2444

SALE or LEASE: High visibility office bldg.7,533 SF on Greenwood Ave. in Bend

PAT KESGARD OR RON ROSS: 541.383.2444

SELECT OFFICE LISTINGS

ABSORPTION

VACANCY

ABSORPTION

VACANCY

4 Compass points I Q1 2012 Compass points I Q1 2012 5

The Q1 2012 Redmond Industrial survey included 75 buildings totaling 1,451,647 square feet . The vacancy r a t e fell again for the third straight quarter to 24.2%, compared to 27.8% in Q4

of 2011, and 29.0% at the end of Q1 2011.

More importantly, the vacancy rate is now the lowest we have seen in Redmond since Q2 2008, when that number was 23.1%. This is very positive news, as the Redmond industrial market has suffered for some time. The trend represents a decrease in over 83,000 sq. ft. of vacancy since the peak of 29.9% in Q2 2011.

NET ABSORPTION — 1ST QUARTER 2012

Industrial buildings over 3,000 square feet

MARKET AREANO. OF BLDGS.

TOTALSQ. FT.

VAC %1ST QTR.

1ST QTR. ABSORPTION

ABSORPTION YTD TOTAL 2011

Redmond 75 1,451,647 24.2% 53,113 53,113 (6,839)

NET ABSORPTION BY SUBMARKET — 1ST QUARTER 2012

Industrial buildings over 3,000 square feet

MARKET AREANO. OF BLDGS.

TOTALSQ. FT.

VAC %1ST QTR.

1ST QTR. ABSORPTION

ABSORPTION YTD TOTAL 2011

Southeast 132 1,630,499 14.6% 36,155 36,155 (6,475)

Northeast 118 1,864,434 15.7% 18,197 18,197 32,085

Central 36 349,040 13.6% 26,106 26,106 18,526

West side 9 178,144 3.9% 0 0 (6,996)

BEND TOTAL 295 4,022,117 14.5% 80,458 80,458 37,140

Bend Industrial MarketCompass surveyed 295 buildings for the first quarter 2012 industrial review. The buildings in the sample totaled just over 4 million square feet. The citywide industrial vacancy rate decreased

for the second straight quarter, from 16.7% to 14.5%. Nearly 585,000 sq. ft. of space is now available for lease.

The positive absorption for the first quarter of 2012 continued to show signs of a strengthening workforce sector, desperately needed in our high unemployment environment. In fact, the 14.5% vacancy factor, representing a net gain of 80,458 sq. ft. is the lowest percentage since the third quarter of 2008, when we reported a 12.0% vacancy rate. And since that time, over 366,000 sq. ft. was added to

the survey. The peak vacancy rate was in the 3rd quarter of 2010, when we had a 20.0% factor.

In the first quarter of 2012, three of the four sectors gained ground, while one remained the same.

The southeast submarket recorded 36,155 sq. ft. of positive net absorption in the first quarter. The vacancy rate fell from 16.9% to 14.6% as a result. Leading the way was a 16,300 sq. ft. lease-up of the Blank’s American Lane building to various tenants, and the addition of AAMCO and the Deschutes Brewery occupancy of a combined 25,525 sq. ft. in the Hatch Warehouse on S.E. 9th Street.

The northeast submarket also recorded a positive net absorption of 18,197 sq. ft. in the first quarter, resulting in the vacancy

rate falling from 17.0% to 15.7%.

There were four reported net losses and ten gains in the northeast sector for industrial buildings.

The central submarket reported a gain in Q1 as well, recording 26,106 sq. ft. of positive net absorption. The vacancy is now 13.6%, down from 21.1% in Q4 2011, a significant drop in the 349,000 sq. ft. sector. The largest transaction was seen in the former Ponderosa Building on N.E. 2nd Street, taking 28,200 sq. ft. of space off the rental market.

No leases or losses were reported in the west side submarket for the quarter, keeping the vacancy rate at 3.9%.

On the sales front, the MicroSemi industrial building on S.W. Columbia St. sold for $2.75 million to a Salem, Oregon investor, which represents a $64 per sq. ft. price for the 43,000 sq. ft. building. Also, as previously mentioned, the Ponderosa Building was sold to an Idaho company, for $629,000 in January, at $22.30 per sq. ft., and will be the new home, and first Oregon outlet, of Pro Rentals and Sales.

Several industrial land sales also took place in the first quarter in Bend and Redmond. A two acre parcel on Redside Court in Bend’s North Brinson Industrial area sold to a local investor for $2.24 a sq. ft., or $195,000.

ABSORPTION

VACANCY

Move-ins exceeded vacancies by 53,113 sq. ft. over the last 90 days, most notably a 27,000 sq. ft. decrease in vacancy in the Dimeo Industrial Plaza on Veterans Way, which saw several leases signed in Q1. Nine buildings reported positive net absorption while only one tallied negative net absorption for the period, nearly mirroring the fourth quarter of 2011’s ratio of 8 to 2. Currently, approximately 350,723 sq. ft. of space is available for lease.

Two lots were reported sold in Q1: High Desert Bank’s 4.8 acre site to an undisclosed buyer for just $.89 per sq. ft., and McConnell Properties LLC,’s purchase of a .56 acre lot for $38,000 from Columbia Bank.

Redmond Industrial Market

Congratulations to tHe

Top Producers1st Quarter 2012:

January

Ron Ross,CCIM,

PRINCIPAL BROKER

February

Erich Schultz,SIOR, PARTNER

marCH

Darren Powderly,CCIM, PARTNER

ABSORPTION

VACANCY

Compass Commercial is pleased to introduce new members of our team

Dan kemp, broker

Dan Kemp has joined the company as a broker. Kemp brings over ten years of sales, marketing and management experience to Compass Commercial and teams with longtime Oregon real estate veteran, Bruce Kemp, CCIM to specialize in sales and

investments in apartment buildings, mobile home parks, storage facilities and business opportunities throughout Central Oregon.

Previously, Kemp served and was recognized as the youngest Regional Marketing Vice President for Wyndham Vacation Ownership, running 18 offices in Northern California. His region exceeded over $100 million in sales in 2009.

His successful career in the timeshare industry earned him top sales honors with Marriott Vacation Club in Park City, Utah where he achieved Super Sapphire Status with $2.2 million in sales during the course of one year.

While new to Compass Commercial, Kemp is not new to Central Oregon. He is a graduate of Sisters High School and now lives in Bend with his wife and four daughters.

Kemp can be reached atdkemp@compasscommercial.com.

staCy olsuFka, property manager

Stacy Olsufka has joined the Compass Commercial Asset and Property Management team as a full-time property manager. Olsufka brings over 15 years of experience in property management to Compass Commercial’s expanding property and

asset management division. She was most

Dan Kemp, Broker

Stacy Olsufka, Property Manager

recently in the real estate department at Oracle in Sacramento, California and prior to that was a property manager with MacLaughlin & Company based in West Sacramento, California.

Her background includes the ground-up real estate development as well as asset/property management of a full range of commercial property investments including retail, industrial and office projects.

Olsufka recently relocated to Bend from Northern California. She can be reached at solsufka@compasscommercial.com.

JenniFer ortaDo Joins

Compass CommerCial as marketing manager

Ortado brings 16 years of marketing and public relations experience to the company. Most recently she managed PR and advertising for NAI Capital, a leading Southern California based commercial real estate brokerage with a team

of over 240 brokers based throughout 14 regional offices.

In her role as marketing manager, Ortado will work with Compass Commercial’s brokerage and property management teams to help promote listings, while working with partners to identify and publicize activities and news within the organization. She will also work to expand the company’s social media and online video initiatives.

Jennifer is a member of the PR Society of America and is a graduate from Ithaca College where she earned her bachelor’s degree in Communications. She recently relocated to Bend along with her husband and 3-year old daughter to be closer to family and to enjoy the region’s numerous outdoor activities and excellent schools.

Jennifer Ortado,Marketing Manager

Compass Commercial Real Estate Services is pleased to announce La Rosa Mexican Kitchen will join the flourishing tenant mix at Brookswood Meadow Plaza, Bend’s uniquely local neighborhood shopping destination located at 19530-19570 Amber Meadow Drive at Brookswood Boulevard just south of Elk Meadow Elementary School.

The top rated Mexican restaurant has enjoyed mounting success in Bend’s NorthWest Crossing neighborhood and is ready to offer southwest Bend residents a local destination for great food and margaritas.

“La Rosa’s reputation for quality and the success of their entire operation makes them an optimal tenant for Brookswood Meadow Plaza,” said Steve Toomey, CCIM, with

La Rosa joins BrookswoodMeadow Plaza

Continued on page 8

6 Compass points I Q1 2012 Compass points I Q1 2012 7

LEASE: Design Lighting buildingCentral corridor, high traffic count in Bend

BRUCE KEMP OR ROBERT RAIMONDI: 541.383.2444

SALE: East side industrial building10,120 SF building on 0.51 acre in Bend

CHERYL GARDNER OR HERB ARATHOON: 541.330.0025

SALE: Multi-tenant industrial building in BendExceptional investment or owner-user opportunity

MARLO DEVIR OR DARREN POWDERLY: 541.383.2444

SALE: Industrial building in BendOwner-user opportunity priced below replacement cost

CHERYL GARDNER OR HERB ARATHOON: 541.330.0025

SELECT INDUSTRIAL LISTINGS

By Jay Lyons, CCIM, Broker with Compass Commercial and Board Member with Volunteer Connect

When I moved to Bend from San Diego last year, I was looking for an opportunity to become involved in the community. In my search, I discovered Volunteer Connect. I was impressed by its mission and subsequently thrilled to be invited to join its growing board. Compass Commercial is proud to support and spotlight local nonprofits that make our community a better place. In this issue of Compass Points, we are pleased to tell you about Volunteer Connect through an interview with the organization’s Executive Director, Betsy Warriner.

CompassCRES: Betsy, tell us about the mission of Volunteer Connect.

Betsy Warriner: Volunteer Connect serves as Central Oregon’s link to volunteer opportunities. Our mission is to unite volunteers with meaningful opportunities to deeply impact the community. By connecting a diverse cross-section of individuals and groups with essential volunteer opportunities, we leverage the time, expertise and compassion of community members to help nonprofit and public agencies deliver vital services and meet many important community needs.

CCRES: Tell us about the origins of Volunteer Connect and how you became involved?

BW: In 2004, I founded Volunteer Insights to help students get involved in real community action to expand their classroom learning. As time went on with Volunteer Insights, all kinds of people, not only students, started using our resources to find volunteer opportunities.

CCRES: How did it become known as Volunteer Connect?

BW: I worked with Jim Schell (then director of the Partnership to End Poverty) and other community leaders to launch Volunteer Connect in 2010 as our regional volunteer center. Jim asked if I would join his efforts to start a volunteer center for Central Oregon, and I jumped right in. We expanded the mission of Volunteer Insights and changed the organization’s name to Volunteer Connect in order to connect all volunteers with all of the needs throughout Crook, Deschutes, and Jefferson Counties.

CCRES: As Central Oregon recovers from the current recession, how has Volunteer Connect been instrumental in engaging community members to help improve the quality of life for residents in Deschutes, Crook, and Jefferson Counties?

BW: Since our launch in 2010, Volunteer Connect has connected over 2,000 volunteers, including students, with more than 100 community organizations. They serve children, youth, elders, people with disabilities, those lacking food and shelter, our environment, and much more. You can get a picture of the variety of volunteer needs and options on our website at www.volunteerconnectnow.org.

CCRES: Volunteer Connect also manages Project Connect and Project Mobile Connect. Can you tell us about these initiatives?

BW: Project Connect is a one-day, one-stop event serving guests who are low-income,

homeless or at risk of homelessness, from Deschutes, Crook, and Jefferson counties and the Warm Springs reservation. The event is held at the Deschutes County Fairgrounds in Redmond.

At the September 2011 Project Connect event, 809 volunteers served 3,421 guests.

The central objectives of Project Connect are:

1. To help homeless and low-income guests improve their lives by accessing needed services;

2. To provide a supportive environment in which volunteers and organizations can be involved in improving the lives of low-income and homeless populations;

3. To inform and educate the region on how our service organizations, agencies and volunteers can help reduce

homelessness, and to motivate individuals to be involved in the solution.

CCRES: And what is Project Mobile Connect?

BW: After Project Connect’s success, the organizers decided to expand over time and location to meet the needs of individuals and families in different

communities. Project Mobile Connect was formed in 2011 to do just that.

CCRES: Volunteer Connect is in need of funds to continue its mission. How can readers get involved or help?

BW: Our website (www.volunteerconnectnow.org) is the key resource for connecting volunteers with opportunities to match their interests and skills with the needs of our communities. We appreciate any kind of support. On our home page, the blue button makes it easy to “Find a Volunteer Opportunity” and the orange button makes it easy to “Donate.”

nonproFit spotligHt Top 10 deals of Q1, 2012Compass closed 85 deals in the first quarter with a total consideration of nearly $11.8 million. Below are the some of the significant transactions for January through March. This is a sampling of our deals. We hold some transactions in confidence per the wishes of our clients.

1) 807 SW Industrial Way, Bend, Office Building Sale, $775,000

Seller: Riverfront Properties I, LLC, represented by Pat Kesgard, CCIM and Bruce Kemp, CCIM

Buyer: Old Mill Properties, LLC, represented by Darren Powderly, CCIM

2) 61367 S. Hwy 97, Bend, Retail Building Sale, $640,000

Seller: Kehrer Family Trust represented by Stephen Toomey, CCIM and Erich Schultz, SIOR

Buyer: Mitchell Holdings, LLC

3) 201 NE Second Street, Bend, Industrial Building Sale $629,500

Seller: Columbia Bank Buyer: KDFJ, Inc, An Idaho Corp. Ron Ross, CCIM represented both parties

4) 815 SW Bond Street, Bend, Office Lease

Lessor: River Bend Investors I, represented by Erich Schultz, SIOR and Gardner Williams, SIOR

Lessee: Century Insurance Group, LLC

5) 301 NE Franklin Avenue, Bend, Retail Building Sale, $569,420

Seller: Curve Enterprises Inc., represented by Howard Friedman, CCIM

Buyer: JHEM, LLC

6) 165 NW Greenwood Avenue, Bend, Retail Lease

Lessor: Boomtown Partners, LLC represented by Ron Ross, CCIM and Russell Huntamer, Broker

Lessee: Rescue Consignment, LLC

7) 969 SW Colorado Avenue, Bend, Office Building Sale (price not disclosed)

Seller: Home Federal Bank represented by Bruce Kemp, CCIM, Darren Powderly, CCIM, Erich Schultz, SIOR, and Peter May, CCIM

Buyer: Deschutes Brewery, Inc.

8) 1430 NW Wall Street, Bend, Leased Investment Sale $450,000

Seller: Home Federal Bank represented by Marlo Devir, Broker, Darren Powderly, CCIM, Erich Schultz, SIOR, Bruce Kemp, CCIM and Peter May, CCIM

Buyer: Hummingbird Fund, LLC

9) 46,609 Sq. Ft. Industrial Land, Lot # 171221 B0 00703, Bend $291,110

Seller: Alan Damon Buyer: Bend Research, Inc. Howard Friedman, CCIM represented

both parties

10) SE Corner Veterans Way & Lake Road, Redmond, Industrial Land Sale $260,000

Seller: Riverwest Properties, LLC represented by Howard Friedman, CCIM

Buyer: Tanney and Shelby Staffenson

Project Connect — services provided

• Medical

• Community Health

• Dental

• Immunizations

• Vision

• Housing

• Clothing

• Haircuts

• Food

• Legal Aid

• Veterans/Education

• Employment

• Social Services

• Children’s Services

• Nutrition

• Addiction Services

• Finance

• Identification

• Birth Certificates

Marketing newsCompass is pleased to announce our corporate transition to LoopNet, the industry’s premiere commercial real estate

multiple listing service. In doing so, we are better equipped to provide client listings with optimum exposure. This premium platform offers our valued clients superior visibility while giving our team of brokerage and property management professionals an increased technical ability to proactively market client business and listings.

Some of the benefits of LoopNet include:

• Broader marketing reach with LoopNet’sover 2.7 million monthly visitors

• Increased research ability with access todata on over 25 million property records nationwide

• Improved marketing platform withcustomized flyers, websites and reports

• Streamlinedtechnologyandsocialmedia

Our premium subscription to LoopNet further enhances our commitment to provide clients with unparalleled service and resources. Our goal is to continually deliver state-of-the-art marketing advantages to maximize results.

8 Compass points I Q1 2012

Opportunity is knockingContinued from page 1

are rational over the long haul, and irrational behavior will be corrected. What we have been experiencing over the last 4 years is a correction of that bubble, pure and simple. The notion that Bend, Oregon home prices belong or ever belonged at 2007 levels, or that current prices will, or should “correct” or “recover” to those levels, is not credible.

A more grounded view is that after 4-years of correction, we are about where we should be, which begs the question, are we done correcting? Recent market activity and data suggest that we are, at least in some residential market segments. Homes priced below $250,000 are in great demand, inventory is low, and multiple offers are common. The west side home market is even hotter with evidence that prices may be seeing a significant uptick there.

Updated statistical data since our chart was created shows that the average home price is essentially unchanged in first quarter 2012. Q1 2012 compared with Q1 2011 shows a 3.5% increase. Another interesting bit of data recently posted by the Central Oregon Rental Association shows the average rental price for a 3 bedroom Bend home increased from $1,012 in 2011 to $1,231 in 2012, a 21% jump. That could reflect some change in the demographic makeup of the rental home market. Today more upper middle and higher-end homes are renter occupied as opposed to owner occupied because of foreclosures and short sales. Nonetheless, such data points to a recovering housing market.

When we look back in historical perspective, it is likely that the winter of 2011/12 will be viewed as the beginning of the housing recovery in Central Oregon. Will the commercial markets be far behind?

opportunity is inDeeD knoCking!

Where are the opportunities today, and how should they be approached? Consumers and investors are highly risk averse in today’s world, as they should be, after the enormous economic shocks and disasters experienced in the Great Recession. Lessons learned in the last 4-years that should be heeded today when assessing the opportunities are:

1. Have a long term investment horizon. 5 years is the minimum; 10 years is better; 20 years is not too long.

2. Be cautious with leverage. Those with high leverage were wiped out in the Great Recession. Those with moderate

or low leverage have survived. We should not forget that lesson.

3. Diversify. Diversify across all asset types including real estate,

stocks and bonds, commodities, and cash and liquid instruments.

4. Buy low, sell high. Sounds elemental, but most of us do not apply this principle. As Warren Buffet says “When people are greedy, be fearful; when people are fearful, be greedy.”

This may be the best opportunity in decades to buy a home. A combination of low prices and low interest rates creates a window of opportunity that should be taken advantage of. If you need a home and you can apply the above four principles, buy a home today. Buy a home for your kids if it makes sense. This window of opportunity will not last forever.

Buy a building or facility for your business. The small business owner in Central Oregon just could not sensibly buy their own building in the boom, because investors and speculators were pushing up prices and subsequently, the business owner out of ownership. That has changed as commercial real estate prices have come down by over 40%, most of the investors are out of the market, and great financing is readily available for commercial owner/users. Explore the possibilities. There are some compelling opportunities out there.

If you have what we call “patient money,” that being defined as capital with a long term investment horizon and no immediate need to generate income, then buy land. Land is still among the least favored asset classes of the market; consequently that is where you will find the best bargains. Land prices in general have fallen below 60% or more from peak values, and in some cases Central Oregon land has been sold for up to an 80% discount from peak values. Buy lots, buy commercial land, buy land in the path of progress. Ten years from now you may be very happy with your returns.

Compass Commercial Real Estate Services who negotiated the lease along with Russell Huntamer, also with Compass Commercial. “With a Spring opening scheduled for Local Slice, an Italian food and pizza eatery owned by David Touvell, Chow’s proprietor on Bend’s west side, Brookswood Meadow Plaza will offer Southwest Bend’s foodies and families expanded local dining options.”

In addition to Local Slice and La Rosa, Brookswood Meadow Plaza’s tenants include a diverse mix of retail, services and office space with tenants including River Rim Coffee House, The Offices at Brookswood, Snap Fitness, Toddles Preschool, It’s the Touch Plantscapes and the plaza anchor, C.E. Lovejoy’s Brookswood Market.

“Brookswood Meadow Plaza fits nicely with our mission of being a neighborhood restaurant,” said Carole DeRose, owner of La Rosa. “We’ve always identified ourselves as a family friendly restaurant in addition to serving as an adult date night destination. We had been looking at the Brookswood space for a while — we love C.E. Lovejoy’s Market and felt that River Rim Coffeehouse and Local Slice are all great complements to our restaurant. We are very excited to expand our business to serve the community in southwest Bend.”

Brookswood Meadow Plaza serves a growing neighborhood with close to 10,000 households within a three mile radius and is the only shopping destination directly serving southwest Bend. The center is continuing its growth to better serve the nearby residential communities.“Brookswood Meadow Plaza offers an exclusive opportunity for businesses to lease space surrounded by a great tenant mix offered at an attractive rate,” Huntamer said. “We are actively seeking tenants providing professional services or looking for office space,” said Huntamer.

“The addition of La Rosa and other new tenants enhances the synergy at Brookswood Meadow Plaza, furthering the great benefits to the neighborhood,” added John Keba with Compass Commercial, property and asset manager for Brookswood Meadow.

La Rosa will occupy 2,983 sq. ft. of space in the southeast corner of the plaza right at Brookswood and Amber Meadow in the same building as River Rim Coffeehouse. The restaurant will commence a complete build out of the space with the goal of opening the new location in the Fall.

La Rosa joins BrookswoodContinued from page 5