Colorado is an odd state, prior to last year, you were unable to buy full…
Although the snow has been the worst in 60 years for many resorts, there is still plenty of snow up top and real estate continues to move forward. A big change was announced this week; Telluride is joining Vails Epic Pass and Aspen/KSI is rolling out the Ikon pass to rival Vail resorts. All this will impact any investments in Colorado mountain towns. What are the best Colorado ski town investment for 2018? Don’t worry my top picks for 2017 remain good picks as well.
To refresh my top picks for 2017 were Winterpark, Crested Butte, and Nederland (near Eldora in Boulder county). All performed very well in 2017 and look to continue that streak into 2018.
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 three 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) to put substantial money into Winterpark and Steamboat over the next several years.
- 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 arcticle) 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 2018?
- Steamboat Springs: 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.
- Durango: Durango is just south of Purgatory (Durango Mountain) and is a well-educated progressive mountain town. You can also get to world class skiing at Wolf Creek which is about 80 miles away. The city has done an excellent job reinvigorating the downtown core with restaurants, bars, etc…. It is an outdoor mecca being consistently ranked in various reports as a top small town city and was ranked in outside magazine as one of the top outdoor playgrounds in the US (Outside online). Durango is a “value” relative to the glitzier front range resorts. As Durango continues to be discovered prices will appreciate further.
- Glenwood Springs: Although not a ski town per se, Glenwood is the Gateway to the roaring fork valley including Aspen and Snowmass. Glenwood just completed a huge downtown revitalization project replacing the main bridge off I70 and linking the downtown corridor across the river. It is the last “affordable” town in the valley. This area will continue to appreciate as the “upvalley locations” continue to price everyone out. It is a very walkable and livable town.
Location 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.
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.
Resources/ Additional Reading
- Copper buys Eldora: http://www.denverpost.com/2016/06/06/eldora-mountain-resort-sold-copper-mountain-powdr/
- Purgatory is sold to local investor: http://www.denverpost.com/2015/02/25/sale-of-durango-mountain-resort-finalized-with-name-change-back-to-purgatory/
- Aspen buys Steamboat and Winterpark: https://coloradohardmoney.com/2017/04/10/biggest-news-colorado-ski-real-estate-today-now/
- Top Colorado ski town investment for 2017: https://coloradohardmoney.com/2017/05/30/top-ski-town-investments-2017/
- Granby ranch goes on the market: https://www.denverpost.com/2018/01/19/granby-ranch-ski-resort-for-sale/
- Telluride joins Vail’s Epic Pass: https://www.denverpost.com/2018/01/29/telluride-epic-pass-vail-resorts/
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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.
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