Big 3 luxury ski area base condo developers reach $128 million in sales
April 11, 2010
Steamboat Springs — The three large luxury condominiums at the base of Steamboat Ski Area that had their genesis in late summer 2007 into 2008 have accounted for $128.6 million in sales, but Edgemont, One Steamboat Place and Trailhead Lodge at Wildhorse Meadows have a distance to go.
According to research compiled by Bruce Carta, of Land Title Guarantee Co., from Routt County Assessor's records, Edgemont developer Atira Group has realized $30.28 million on sales of 13 condominiums, and Trailhead Lodge, developed by Resort Ventures West, has sold 32 condominiums for a combined value of $27.43 million.
One Steamboat Place, which began closing sales late in 2009, has reached $71 million, including 11 whole-ownership condominiums accounting for $40.45 million and 73 Residence Club memberships, which add $30.65 million.
Developer Timbers Resorts originally reported that its pre-construction sale process had yielded hard contracts on 148 of the 176 one-eighth share Residence Club memberships and 36 of its 38 whole-ownership condos, where residents walk out of the building onto the snow edge at Steamboat Ski Area.
Trailhead reported after a July 2007 pre-sales event that it had 63 of 86 condominiums under hard contract for an aggregate $56 million. RVW Principal and Chief Financial Officer Brent Pearson said nine of the original buyers were absorbed into new partnerships that resulted in fewer contracts. And his company continues to work with eight of the original buyers.
Edgemont had a pre-sales event in June 2008 that developers said tied up 22 of 42 condominiums for a combined $45 million. The total number of condominiums was reduced when some buyers purchased additional units to allow them to create larger homes. Sales Director Mark Murrell said the total count now stands at 19 contracts on 39 units.
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One Steamboat Place is the only one of the big three to have recorded sales since March 18, when Carta produced his report, but Murrell reports Edgemont just put a three-bedroom condo under sale and expects it to close this month. The new Edgemont contract is representative of a relative handful of deals that are new sales and aren't attributable to pre-construction contracts like the large majority of the $128.6 million spread among OSP, Trailhead and Edgemont.
One recent sale at OSP was a $3.8 million closing on a whole-ownership unit. There have been six Residence Club sales in late March and early April at OSP.
"They're new sales," Timbers CEO David Burden said. "Yes, they replaced somebody else, but we still think that's tremendous."
Resort Ventures West added to its sales total this winter when it was cleared by the city of Steamboat Springs to sell more modest condominiums in the twin First Tracks buildings originally dedicated to affordable housing at modest rates. First Tracks now has seen 16 sales for a combined $4.5 million, with a 17th set to close soon, according to RVW Principal and Chief Financial Officer Brent Pearson.
Pearson said going forward, his company intends to continue positioning itself as a different product from OSP and Edgemont, one with similar interior finishes and amenities at lower price points, a little further removed from the ski slopes.
"We're a tier away from One Steamboat Place and Edgemont but with an extraordinarily high quality product. That's where we'll continue to be in the market. It comes down to reaching the people who want the best of the best in our range."
Murrell said his sales team hosted 165 prospective buyers beginning right after Christmas and continuing through Friday. Some of those visitors already were on his list of contacts that are serious about buying and a substantial number were new. Of the latter group, a substantial number, he said, expressed a strong interest in buying in Steamboat.
Leading into the summer and fall, working with all of the potential customers and helping them with the decision-making process is at the heart of his marketing plan. He knows it will take patience.
"There's not a lot of urgency right now," he said.
Burden said early in December 2008, he already was adjusting his company's financial targets to allow it to ride out what turned out to be a deep recession.
"When things started to go south at the start of 2008, we prepared ourselves," Burden said last week. "We said, 'Let's set our sights a lot lower, and let's save marketing dollars because we don't know how long the economy will take to get to a reasonable level. Let's make sure that everything works at about half'" of 100 percent sell-out.
Burden said his company has negotiated a bulk sale of 10 whole-ownership condominiums with an outside destination club his company has done business with in the past. They will defer the purchase of five of those units indefinitely, but he expects two or three sales to close soon and the rest of the first five to sell this year.
So, Burden said, his present goal is to sell half of the 28 condominiums (the original 38 minus the 10 spoken for by the outside vacation club).
"If we can end the snow season with about half our whole-ownership inventory sold, that's more than OK," Burden said.
He said his sales force has a couple of sales pending with two new sales due to close in July.
Burden said his company has realized that in order to sell Residence Club memberships ranging from $415,000 to $540,000, it will be necessary to do something it has rarely done in the past: arrange with banks to do in-house financing.
Burden said local banks have done their part in getting OSP sold, each financing a handful. Now, potential buyers for Residence Club memberships either need or want financing.
"We arranged a $10 million line of credit for Esperanza (resort on Mexico's Baja Peninsula) but only 2-3 of it was used. People didn't want it. Now, it's absolutely critical," Burden said. "We're in the process of finalizing multiple bank participants" to finance sales.
The purchases won't be highly leveraged, he said.
"They might be 60 percent to 70 percent at most," Burden said. "We have people who are ready and waiting to buy, but they need financing. That's a key element."
Pearson said RVW is beginning to see resort lenders coming back into the market.
"That's a really important thing," he said.
Murrell said he was impressed and encouraged by the fact that four of Edgemont's 13 buyers were able to arrange conventional financing for the condominium purchases.
As early spring gives way to late spring in the Yampa Valley, Burden said, his staff would welcome guests in May who already own condominiums at Timbers' other resorts. Although they already have trading privileges, many of his clients own two condominiums, and a few own three.
"We want to get existing owners into Steamboat to experience it," he said. "We need life and activity up there."
By July, in-house restaurant Truffle Pig is expected to open, and the sales staff will continue to host sponsored vacation visits for prospective buyers who will pay for a portion of the cost of their visit. But Burden knows it will take time.
"We have several years to go," he said.
Pearson did not disagree.
"For us, it's more about an overall market return," he said. "We've been waiting for the overall market change to occur. We've started seeing people come back now."