15 Highmark units to be auctioned

Sale at ski area base planned for March 4

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— Developers of The Highmark condominium project at the base of Steamboat Ski Area announced plans this week to offer 15 unsold units in the building at auction March 4.

The property is owned by Steamboat Ventures Ltd., which includes principals in Concord Wilshire Partners of Los An­­geles, which has been active in development in Florida and Las Vegas.

William Bone, president of the National Auction Group in Gadsen, Ala., said the owners’ intent is to sell one of the 15 condominiums with no minimum price but with reserves on the remaining units.

“Typically, it’s the first unit that sells at absolute auction, and you’d just offer the successful bidder his choice,” Bone said Friday. “In this case, I’m not certain how they want to do it. They really intend to sell all 15.”

The last reported sales of condominiums at The Highmark came in February 2008 before the national real estate crisis was fully realized. A four-bedroom den and loft penthouse unit sold for nearly $3.2 million. The sales price converted to $1,329 per square foot, and at the time was the most paid on that basis for a residential property in Routt County. There was also a nearly $2.4 million sale that same month.

Construction on the project, known at the time as The Chadwick, began in August 2003, but the foundation was abandoned after the original developer said rising construction costs had busted his business plan.

Work on the building did not resume until September 2005, after the city of Steamboat Springs approved changes to the development plan to allow value engineering. Concord Wilshire took over the project in 2005, reportedly rid itself of some pre-existing contracts and announced that it had pre-sold 17 condos at new prices and listed seven more for sale with an aggregate listing value of $13.3 million.

The building was completed in June 2007.

The developers sued to force seven contracted buyers to close on the sale of their units in December 2007. An attorney representing the defendants countered that the plaintiffs were disingenuously attempting to force his clients into defaulting in order to re-market the condos at higher prices.

The suit was settled in March 2008.

Since then, the six-story condominium tower has been managed as a boutique hotel.

The management is quoting a nightly rental rate of $1,100 for a four-night stay in a three-bedroom condo in mid-February.

The property offers an indoor/outdoor swimming pool, a lobby with a lounge and stone fireplace, game rooms and storage for ski equipment and bikes.

The auctioneers report that the units will be sold furnished. The property will be open for inspection by appointment beginning Feb. 12 by calling 800-650-0882. Auction and registration terms and financial requirements may be found at national-auction.com. The live auction begins at 3 p.m. March 4.

Comments

steamboatsprings 4 years, 10 months ago

That was polite. The original developer never really had the money to start and didn't pay the contractor so the contractor stopped working. That is still very polite. The Highmark has a variety of design features that make it challenging and any sales above $800 a foot were well beyond it's value even in 2007. It was never worth $1300 a foot when you could buy in One Steamboat Place and Edgemont at $900-1300 a foot on location alone not to mention other bigger differences. If they are serious about selling these now they need to be under $500 a ft and that doesn't mean the market is down its more about quality and where it actally was to start with for the package the Highmark represents.

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Scott Wedel 4 years, 10 months ago

The nice thing about an absolute auction is that it ends the discussion of what an unit should sell for per sq ft and gives the answer.

The real question is whether we will have yet another local highly promoted real estate auction in which the seller does not accept any of the bids.

I note that one unit (6A) was foreclosed upon a couple weeks ago so Wells Fargo is presumably already in the process of discovering how low it must go to get a sale.

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greenwash 4 years, 10 months ago

Anyone want to make a bet that not one unit sells?

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dontsleep 4 years, 10 months ago

Greenwash, I will bet you that one unit sells. What is the bet? I suggest that if one unit sells you dont post anymore?

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Scott Wedel 4 years, 10 months ago

I think there are good reasons to think that they will sell an unit at absolute auction.

I think there is a good chance that the auction has less to do with trying to drum up some publicity than trying to determine current market value. I note that they have 15 unsold units out of 25 and one is bank owned (note that 17 pre-sales became 8 sales). They and their lenders need to determine at what price they can expect to sell units in order to figure out how to proceed.

I think the more interesting bet would be whether it sells for above or less than $650 a sq ft (half of the peak sales price). Maybe we should all guess a sales price and see whom is the best prognosticator.

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dontsleep 4 years, 10 months ago

Scott_Wedel, After reading many posts by greenwash in the past it did not suprise me that a bet would be offered that no unit would sell in an absolute auction. LOL. As for the price per sq ft I would guess $450 per. The reason is that the finishes were not good, with granite tile counters and baseboard heaters as well as the uncertainty that has followed the Highmark for so long. There will be a discount to real market value based on these items. IMO, the real market value is probably about $600 per sq ft.

Actually greenwash I am happily married and not a realtor, not that it matters. I will bet you one ski pass next year that one unit sells? Dont worry if the market continues down you will be able to get out of that trailer soon enough.

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Scott Wedel 4 years, 10 months ago

SERIOUS FACTUAL ERROR IN ARTICLE "The last reported sales of condominiums at The Highmark came in February 2008 before the national real estate crisis was fully realized."

NO - from the routt county assessor's website: 8/28/2008 Sale Price: 2,977,400 unit 6C 2285 sq ft 6/27/2008 Sale Price: 3,119,400 unit 6B 2394 sq ft 6/5/2008 Sale Price: 1,832,000 unit 5D 1546 sq ft 4/17/2008 Sale Price: 2,116,100 unit 4C 1965 sq ft 4/11/2008 Sale Price: 1,895,300 unit 3E 1936 sq ft

Thus, of the 8 recorded sales at the Highmark, 5 occurred after February 2008. In fact, the $3.2M unit, cited in the article, happened in June 2008.

By August 28, 2008, the last sale at Highmark, the scope of the real estate crisis was pretty clear. That AIG and other Wall Street firms were in severe difficulty was known. By then all that was left in the financial crisis was September when the death spirals threatened the entire financial system.

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Scott Wedel 4 years, 10 months ago

dontsleep, I note that this area has recently seen "absolute" auctions in which there was a reserve and the property did not sell. So it is not completely ridiculous to speculate that no property will be sold at an absolute auction.

The commonly quoted number is that property sold at auction is likely to sell at a 10% discount to fair market value. So I don't understand why you think it'll sell at action for a 25% discount. Especially in that market segment where timely financing is not a major hurdle.

The part about the Highmark that could concern buyers is the whole boutique hotel operation. That has high overhead and if rentals are soft then expected high income is not present. With all of the unsold luxury spec homes, it is certainly not obvious why a condo at the Highmark is going to do well attracting luxury visitors

I know nothing about the interior finish or furniture of these units. I will base my guess on that I think that market value is down 40% from the peak, 10% auction discount and average sales of about $1100 per sq ft. So I expect it to sell at about $600 per sq ft.

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