I was surprised to see the news that Eldora, in Boulder County, is up for sale. What caused the sale of Eldora. What does this mean for real estate in Nederland, CO? Who will buy Eldora and what does this mean long term for the area?
A Brief History of Eldora ski resort
Powdr corp acquired Eldora in 2016 and has put substantial money in to upgrade snowmaking, lodges, etc… Prior to their acquisition it was owned by private partners for the last 25 years. In 2018 Powdr teamed up with Alterra to offer the Ikon pass at Copper and Eldora.
Why is Powdr corp selling Eldora?
From the press release: “To strategically manage POWDR’s portfolio in alignment with our founder’s and stakeholders’ goals, we aim to balance our ski business with new ventures in the National Parks sector and Woodward,” the company wrote in a statement. “Over the coming weeks, we will list three of our ski resorts — Eldora, Mt. Bachelor, and SilverStar — for sale.”
What is the real reason Powdr is selling Eldora?
My gut says the real reason is that Eldora is not profitable ( I have no information other than what I have read and my personal observations going there). It is a daily drive up resort that attracts guests primarily from the front range as there is no lodging at the resort. Drive-up skiers as considerably less profitable than destination skiers so to make money with solely a drive up resort is nearly impossible with all the costs involved.
Who will buy Eldora?
There are basically three major players in the ski industry, Alterra, Vail, and Powdr corp. I doubt Alterra or Vail would see value in Eldora as they already have a lock on the Colorado ski market. Furthermore, Alterra announced earlier this year that it was buying Arapahoe basin and The Biden administration is investigating Alterra Mountain’s plan to buy the Arapahoe Basin ski area for possible antitrust issues.
Long and short, the prospective buyer of Eldora will likely not be Alterra or Vail and it will be either a local investment group that will keep it as an independent mountain or a smaller regional player. It is a tough mountain as there is no lodging and the weather is challenging in the front range mountains. Whomever the buyer is it will be a struggle to make money in the venture
What does the sale of Eldora mean for real estate?
Eldora is outside the town of Nederland, just west of Boulder, CO. First, there will be no impacts on Boulder as it is a thriving market due to the University, tech industry, etc… Nederland is a “suburb” of Boulder about 30 minutes west (17 miles) so the big driver of property value in Nederland is the proximity to Boulder.
To understand the impacts of Eldora’s sale, I looked at Evergreen, CO. Evergreen was home to a ski resort that was eventually sold to Echo Mountain. Although it is much smaller than Eldora there really has not been much if any impact on real estate values. I did a chart below and it is clear that there is a high correlation between Nederland and Boulder which means that values in Nederland should not have huge swings due to the sale of Eldora.
Summary
The news of Powdr selling Eldora is not surprising as when the deal went through in 2016 I was a bit surprised that any company could actually make money at Eldora due to its lodging limitations and tough location. As I have said, the ski industry in Colorado and across the country is extremely challenging especially for the smaller resort operators like Powdr that do not have the deep pockets like Alterra or Vail. The ski areas at/near vail/Alterra resorts will outperform the smaller ski markets over the long term.
Fortunately the big draw for Nederland (where Eldora is located) is its closed proximity to Boulder and less expensive housing prices than Boulder. Nederland real estate should do fine even with the sale of Eldora. Although I have high confidence in my real estate predictions, I have very low confidence in who will be the next buyer of Eldora other than to say that Vail and Alterra are likely not players as they already have such large market shares in Colorado.
Additional Reading/Resources:
https://www.denverpost.com/2024/08/22/powdr-company-selling-eldora-ski-resort-colorado/
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. He is the owner of 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 Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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