A real estate investor that specializes in distressed property has set its sights on Oswego, a bubble-era boomtown starting to bounce back from the bust.

A venture led by Atlanta-based Turnstone Group LLC paid $1.67 million late last month for a 20-acre parcel zoned for 154 town homes in the southwest suburb, Kendall County records show. Turnstone is exploring all its options, and there’s a “decent chance” it will develop the site in the next year to 18 months, said Turnstone Vice-President Brian Linné, declining to comment further.

The land is part of Southbury, a massive 1,030-unit, 352-acre project that is the largest residential development in Oswego, said listing agent Marvin Vestuto of St. Charles-based Vestuto Real Estate Corp.

Records show a venture led by Naperville-based Lakeshore Development Group Inc. paid $5.09 million for the town home lots in 2006, buying them from Southbury’s master developer, Alexandria, Va.-based developer Ocean Atlantic Services Corp. The Naperville venture lost control of the property, called Seasons at Southbury, to Aurora-based Old Second National Bank after the lender filed an $11.4 million foreclosure suit against it in 2009.

“The building has been picking up in the subdivision,” said Billy McCue of Yorkville-based McCue Builders Inc., which is building custom single-family homes at another Southbury “pod” of lots.

The residential crash has created opportunities for investors like Turnstone to acquire large tracts of land at distressed prices. Demand for new homes has returned amid the rebounding housing market, especially in southwest exurbs like Oswego that doubled in population during the bubble. Suburban new-home sales rose 35 percent during the first nine months of 2013 from a year earlier, with the southwest suburbs the most active single-family market, accounting for 21.4 percent of sales, according to Schaumburg-based housing consultant Tracy Cross & Associates Inc.

Turnstone could develop the land itself or sell to another builder. The investment firm focuses on distressed real estate and debt, but also “select development and redevelopment opportunities,” according to its website. Since 2011, the firm has acquired about 17,000 lots ready for development.

At Seasons at Southbury, Turnstone paid just $10,844 per lot. Opportunities to buy finished lots at recession-era prices are dwindling, said Mr. McCue, who did not consider the Southbury deal because he is focusing on single-family homes. Yet he expects a new builder will do well with town homes there, offering a lower-cost option for those looking to buy in the neighborhood. He estimates the entire Southbury development is about 65 percent completed.

“It’ll make the subdivision nicer and built out, rather than having weeds growing in a field,” he said.

An Old Second National representative and Dr. John Gustaitis Jr., an Indiana-based physician and a manager of Lakeshore’s development venture, could not be reached for comment.

David Lee Matthews • matthedl@gmail.com