Tuesday, July 25, 2006

Steamboat Ski area sale

I got the following question from someone who reads this blog and thought I'd share my answer plus a few edits for clarity since the Steamboat ski area sale is such a hot topic right now.

Jon, Do you think that the sale of Steamboat, to someone with deep pockets like Vail Resorts, will have an immediate impact on real estate values in Steamboat? D.
BTW, Enjoy your blog, check in often,

My answer: Thank you for your message and comment. In regards to the ski area sale as you know nothing is certain so we have to look at similar examples for guidance on what could happen if the ski area actually sells. In 2002 when ASC, the owners of Steamboat, walked away from the sale of Steamboat to The Mueller Family from Okemo out east. The Mueller's went on to buy Crested Butte in 2003. I can't quote figures but Crested Butte went from a sleepy market to very strong and property values have gone up dramatically. A friend that bought in Crested Butte just before the sale said prices have doubled since then but I don't have anything on paper to give you hard numbers. (BTW it may be hard for Vail to buy Steamboat because they accepted some anti-trust provisions dealing with having too much Front Range market share. This is not a direct hit but would likely be a limiter. I don't think Vail would be the best buyer but someone with their passion from experience would be good.)

CB has a nice mountain with some great terrain but is 5 hours from Denver, has limited flight access, was a much smaller of a real town vs. just a resort and several other factors. Steamboat is a real town with diverse recreational assets, is in process of starting a base area redevelopment, 2 new developments that will bring a new level of quality (and some 700-$1000 /sq ft comp prices) and sells at a discount to comparable quality resorts. This is before you consider a possible sale.

Most major resorts in Colorado and Utah have a real capacity problem lift wise because they have such a large day skier population driving in from major metro areas, it is normal to wait in 10-30 minutes lines in Vail, Breckenridge, Copper, Winter Park, Snowbird, Alta, Park City etc. out side of peak weeks. Steamboat is dramatically better with nearly no-existent lines except for 1.5 hours in the morning when it is 10-20 minutes during the 2-3 busiest weeks. One high-speed quad at the base would take care of most significant lines. The ski area is planning a high-speed six pack so a new owner could move quickly on this.

Are we seeing an impact now? I sure am. Prices haven't taken a step in most areas yet (outside of a few fishing trips) but are likely to for quality units if a sale of the ski area closes. I have seen a big step in inquiries and seriousness of the people I am working with. Let's talk some time, I can answer your questions better and the conversation can go where you want it to. Thank you, Jon
Click the following link for a more recent update on progress towards the Steamboat Ski area sale or Steamboat Ski area sale is announcement?

No comments: