Atira Group retires $45M debt on Edgemont in Steamboat
April 15, 2011
Steamboat Springs — Edgemont, a slopeside condominium project at Steamboat Ski Area, put up its 10th transaction since July 1 this month with the $2.4 million sale of a three-bedroom plus den unit that was priced at $3.15 million last year and had the asking price reduced to $2.52 million.
The sale was the first of 2011 and, combined with a $3.22 million deal for a five-bedroom condo Dec. 30, brought the 10-month sales total to $14.47 million. For the developers, Atira Group, the April 5 sale represented a significant turning point that wasn't apparent from the outside looking in: It allowed Atira to retire the $45 million construction debt on the building that was completed in late 2009.
"Pretty unique, isn't it?" Atira Vice President of Development Garrett Simon said Thursday. "It's a huge milestone for us. It means we can begin returning equity to our original investors. This is the culmination of hard work over the last four years and means we withstood as best we could the big shift in the market. We realized where the market was going and adjusted our prices accordingly."
Atira sales supervisor Allison Finn said her company has now sold all but 15 of the original 39 condos in the project. Although Atira has assigned primary responsibility for its sales effort to five local Realtors representing five firms, Finn landed the most recent sale, to a buyer who vacationed at Edgemont in early December.
Dave Irish, one of the five local real estate brokers, said he sees signs this spring that the thinking of buyers looking at Steamboat Springs has changed.
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"I think we've passed the period where the uncertainty of the market had people sitting on the sideline," Irish said. "Over the winter, I saw large numbers of people come in and say, 'Tell me what's going on with the market.'"
Both in terms of the overall real estate market and Edgemont, traffic and showings are up, Irish added.
"All five of us have had excellent showings at Edgemont with strong customers," he said. "And we're all supportive of any sale at Edgemont."
The last sentiment is at least partly because all five Realtors receive a portion of a listing commission on transactions.
Irish is with Steamboat Ski & Resort Realty. The other listing brokers at Edgemont are Colleen de Jong, of Prudential Steamboat Realty; Charlie Dresen, of High Mountain Sotheby's; Eliese Pivarnik, of Colorado Group Realty; and Arlene Zopf, of Steamboat Village Brokers.
10 sales in 10 months
The past 10 sales at Edgemont run the gamut of the unit mix, beginning with a pair of one-bedroom, 1.5-bath units that sold for $561,750 and $580,300. There were three sales of two-bedroom units for prices just more than $1 million and a similar number of three-bedroom condos beginning at $1.4 million and ranging to $1.62 million.
The majority of the sales came in July and August, when a promotion by Atira offering 20 percent discounts for three contracts took hold. Fall was quiet, followed by three sales in quick succession during the last two weeks of December.
There is no dedicated property management company at Edgemont, but of the 24 sold units, eight are managed for nightly rentals by a variety of property managers, and four more developer units are used to host prospective buyers, Finn said.
The ski season that just ended marked the first full winter the eight rental units were available, Finn said, and demand was strong.
"They were booked solid from Dec. 25 through the end of March," she said.
Nightly rates for a three-bedroom condo were typically $1,050, but they went as high as $1,500 during the December holidays, she said.
Finn said the non-owners who vacationed at the ski-in, ski-out property during the winter mingled with owners and made it a livelier environment, but her company still wants to strike a balance between the residential feel of the project and guest vacationers.
Simon said the nightly rentals represent a significant marketing opportunity as sales at the project go forward.
What the future holds
Atira won city approvals in February 2010 to redevelop Steamboat's Ski Time Square into five condominium buildings including about 200 luxury units, but it already was clear at that point that it would be a long time before anything happened. Atira asked for a 10-year vesting period from the city, which would give it a decade to pull a building permit for the project. The Steamboat Springs City Council granted six years.
Atira officials have been close-lipped on the subject, but a 2009 article in Bloomberg News cited a solicitation to investors confirming that Intrawest/Steamboat Ski Area owner Fortress Investment Group was the primary investor in the $54 million acquisition of Ski Time Square. The source of the funds was the Fortress Drawbridge Special Opportunities fund.
Simon readily said last week that ultimately, the existing plans for Ski Time Square and the old Thunderhead Lodge site will be reconsidered and adjusted to meet demand for a significantly different product.
"Obviously, someday we'll address that, but there's no re-envisioning right now. We've been in touch with the city, and they still see it as appropriate for high density," Simon said. "We feel like we've got a good grip on where the market is. It's a different buyer today. The investors are gone, and it's focused on the end user."
Simon observed that although the abrupt shift in the resort real estate market during the past several years has been difficult here, it could be worse.
"It could be a great thing for Steamboat," Simon said. "It's painful now. The good news is that there aren't half-finished eight-story buildings up there" that no longer have a market.
Atira's physical presence in Steamboat is an office in a residential condo it rents from an owner at Edgemont.
Mark Mathews, former vice president of development, is no longer with the company.
Simon said he was relocating his family to Boulder this week from Arizona, where they spent the winter. He said he was going to Boulder to pursue opportunities for Atira but would average about two days a week in the Steamboat office during summer.
To reach Tom Ross, call 970-871-4205 or email tross@SteamboatToday.com