A 'Grand' investment

Steamboat Grand Hotel offers unique share of market

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— Records at the Routt County Courthouse show American Skiing Co. closed 49 different transactions involving interval ownership at the Steamboat Grand Hotel during the four-month period beginning Jan. 1 and ending April 30.

Those transactions, ranging from quartershares to multiples of quartershares, totaled $6.6 million.

Steamboat Grand sales are reflected as warranty deeds stored in a database in the Routt County Clerk's office.

American Skiing Co. was originally approved by the city for 232 condominium units. Multiplied by four quartershares available for each unit, that would yield more than 900 shares for sale.

The total number of rooms that can be rented in the hotel leaps to more than 400 because many of the units have bedrooms that can be "locked off" and have an entrance to the hallway. However, the lock-off rooms don't increase the number of quartershares available for sale.

American Skiing officials don't hesitate to say that it's a key part of their plan to de-leverage real estate debt by about $40 million in 2001.

They also say that realistically, they don't expect the hotel to sell out for another 17 to 24 months.

Former American Skiing Director Les Otten said in March, at the time of the company's second-quarter report, that the hotel was only 40 percent sold.

The transactions at the Steamboat Grand during the first four months of the year ranged from a low of $39,900 to a high of $599,900.

However, county records don't reflect whether the sales are for one or more quartershares.

Steamboat Grand units currently listed for resale through the Steamboat Springs Board of Realtors Multiple Listing Service give insights into how much the shares are selling for.

Ruth Krinke of Steamboat Real Estate Inc. said the asking prices for resales of Grand quartershares definitely reflect some appreciation, but the other side of that picture is that very few quarter shares at the Grand have resold, at least through the MLS.

The Multiple Listing Service shows that there are currently 30 Steamboat Grand quartershares, or multiple shares, on the market. They begin at $42,500 and go up to $205,000 for a quartershare or $585,000 for a "three-quarter share."

Historically, only three have ever been resold through the MLS.

The sales staff at the Grand won't be free to handle resales until 80 percent of the shares are sold, Krinke said she has been told.

Krinke currently has a prime Steamboat Grand quartershare listed for resale. The one-bedroom, two-bath unit is on the sixth floor of the hotel, has a vaulted ceiling and offers views of the ski slopes. The unit is unusual in that it is one of just a handful that came with membership rights at the Sheraton Steamboat golf course. Those privileges are a carryover from a previous real estate contract, and locals snapped those quartershares up quickly because of the availability of a golf course membership, Krinke said. She has the quartershare listed at $135,000 and has received some interest in it.

Pam Vanatta of Prudential Steamboat Realty also has a sixth-floor unit listed for sale. The unit has two bedrooms and two baths. Vanatta is offering all four shares for $740,000, or quartershares at $185,000.

Krinke said her review of American Skiing's sales information tells her that Grand Summit purchasers can reasonably expect rental income from the hotel to cover fees, but probably not service debt on their purchase of a quartershare. And that assumes that they reserve only two prime ski season weeks, plus perhaps a week in the summer, for their own use. The balance of the weeks of the year would be turned back in to rental.

"People should check with their accountant," Krinke said. "There could be tax advantages for the right person. There are definitely people for whom this works." Krinke said many people are attracted to owning a vacation unit that offers the amenities and location of the Grand and doesn't require them to invest $500,000 to get into the Steamboat market.

Steamboat Grand buyers own a specific week in every four for the unit they buy. When their unit is occupied by a renter during their week, they receive income minus management fees, not unlike other condominium projects in Steamboat with management companies . Hotel executive Steve Conners said although American Skiing still owns a significant number of units, it doesn't favor its own units when taking reservations. Conners said Director of Owner Relations Tim Hargreaves is in frequent contact with owners to discuss rental of their units.

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