Regardless of all the talk of a recession, soft landing, or something in between. Many…
2019 is on track to be a great snow season in Colorado with many resorts opening with the most terrain in the last 15 years. Is mountain real estate in 2019 going to be as good as the snow? What areas should you look to invest in?
Before getting into the top 3 Colorado ski towns it is important to refresh a little on what is happening in the industry. The recent industry changes will drive real estate into the future.
Telluride Marries Vail?
Maybe marriage is a strong word, but Telluride joined the ski dating scene and is now in bed with Vail and their Epic Pass. This is a huge change since Telluride last year was in bed with the Rocky Mountain Collective (a competitor to Vail’s epic pass). The industry consolidation is now on super drive with two major players gunning for resorts either through partnerships or acquisitions.
Major Ski Industry Changes
To refresh on what is happening in the industry. If you missed the news, there have been several purchases/mergers involving many Colorado ski resorts. Below, I’ve highlighted the big four in Colorado. Each of these will have a substantial impact on real estate in their respective markets. If the purchase of Eldora by Powdr corporation is indicative of the future, look for KSI (Aspen group, Alterra) to put substantial money into Winterpark and Steamboat over the next several years.
- Vail Resorts buys Crested Butte, this purchase closed late 2018
- Aspen buys WinterPark and Steamboat (and some other resorts like Mammoth)
- Copper (Powdr corp) buys Eldora
- Purgatory is sold to James Coleman (local Durango resident)
In Colorado and throughout the country, the big are getting bigger and many of the smaller players will no longer be able to survive. A good example is Granby Ranch which is now on the market (See Denver Post article) with no major viable buyers. It would be ill advised to buy in a market like Granby ranch with the uncertainty of whether it will continue as a going concern. Due to its size and location it doesn’t fit any need for the major resort operators.
What are the top 3 Colorado ski town investments for 2019?
- Steamboat Springs: Steamboat was on my list last year and will continue into 2019. Since the announcement last year that Aspen/KSI was buying Steamboat, the market has been on fire. There is no inventory under 1m and supply is severely constrained. Steamboat is a unique market that is growing exponentially in the summer time as well. It is substantially undervalued compared to places like Vail and therefore much more attractive to many buyers. The market should continue to appreciate nicely as supply is nonexistent and demand continues to increase. The announcement of the purchase of the resort should spur continued investment in the base area as well.
- Crested Butte: With their recent purchase by Vail resorts there is continued upside in Crested Butte. Crested Butte is landlocked surrounded by National Forests and therefore supply will remain tight in this market. Many of the properties near the base area are very dated and therefore have upside as Vail invests money to upgrade the base area. Crested Butte is still considered “undiscovered” and will quickly get “discovered” with its addition on the Epic pass.
- Telluride: Telluride is an anomaly and not owned by the major two resort companies (Vail and Alterra) but is still an excellent investment. Telluride, like many resorts, is landlocked and therefore supply is nonexistent. Telluride is also unique with its National and international draw. People are attracted to Telluride since it is not Aspen or Vail and a bit lower key than the other Colorado top tier resort markets. Telluride will continue to hold its value even during another recession due to lack of supply and international demand.
Location is Key:
Even though, I listed my top three mountain pics above, location within the mountain towns is key. In any mountain town/ski town location is key to success in real estate. For example, in Steamboat there are 4 unique markets (the mountain base, between mountain and downtown, the downtown core, and the west side of town). Values and appreciation rates are different in each of these markets. When you are looking at real estate in any of the mountain towns make sure you understand fully the submarkets that are driving values since not all areas are equal. For example, on the West side, values are limited to around 1m and less, in the mid mountain and mountain areas houses are going north of 5 million. This is quite the range in prices for areas only a few miles apart.
How can a Colorado hard money loan help with your Colorado ski town investment?
Every year I write the list of best ski town investments from personal experience. I spend considerable “windshield” time looking at transactions in both the front range and various ski towns throughout the state of Colorado. Each mountain town is unique with its own unique submarkets. Understanding these submarkets is the key to real estate success.
This intimate knowledge of the various ski towns in Colorado allows us to understand the uniqueness of each submarket to structure a transaction that fits your needs. Furthermore, all three of the markets above are “hot” markets with limited inventory. Time is one of the most important factors in getting a transaction closed. We can close transactions in 5-10 days. We can also lend on properties that don’t qualify for traditional financing like nightly rentals/ condos that can’t qualify for government loans and have made loans on many commercial properties that don’t fit bank guidelines. For example, we loaned on a partially occupied commercial property in Telluride that had an outstanding location but couldn’t cash flow for traditional bank financing. As you are looking at the mountain communities and have questions feel free to contact me.
I need your help!
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Written by Glen Weinberg, COO/ VP Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in the Colorado Real Estate Journal, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Fairview is the recognized leader in Colorado Hard Money and Colorado private lending focusing on residential investment properties and commercial properties both in Denver and throughout the state. We are the Colorado experts having closed thousands of loans throughout the state.
When you call you will speak directly to the decision makers and get an honest answer quickly. They are recognized in the industry as the leader in hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all they need is their simple one page application (no upfront fees or other games)