Originally Posted: November 1st, 2010
We have an exciting announcement, other than the fact that the political commercials will stop running tomorrow. Resort Realty Capital, (http://www.resortrealtycapital.com/) a private equity real estate investment company has been launched. We have assembled a dynamic and experienced team to capitalize on commercial real estate in resort markets that are suffering through the economic downturn. Why do we like the resort markets?
1) We like to invest in markets which have natural barriers to entry, such as Rocky Mountains! The availability of space is determined primarily by supply and demand. In brief, changes in population, transportation, land-use controls, employment, location, use and numerous other factors influence what real estate is available and where. Therefore, these changes will impact supply and demand. For example, as demand increases and supply or availability decreases, rental rates and property values increase. This translates into a higher return on investment.
2) People like to play. According to The Denver Post, June, 2010: “The state’s ski resorts tallied 11.86 million skier visits, a 0.8 percent increase over the previous season”. And this was during the heart of the recession.
The following are just some of the resorts we are focused on.
Vail is the single most visited ski resort in the United States for the 2008/2009 ski season and the single largest ski mountain in the United States. Vail offers some of the most expansive and varied terrain with approximately 5,300 skiable acres including seven world renowned back bowls and the rustic Blue Sky Basin area of the resort.
Breckenridge Ski Resort
Breckenridge is the second most visited ski resort in the United States for the 2008/2009 ski season and host of the highest chairlift in North America, the Imperial Express Super Chair, reaching 12,840 feet and offering above tree line expert terrain. Breckenridge is well known for its historic town, vibrant night-life and progressive and award-winning pipes and parks.
Keystone is the fourth most visited ski resort in the United States for the 2008/2009 ski season and home to the highly renowned A51 Terrain Park as well as the largest area of night skiing in Colorado. Keystone also offers guests a unique skiing opportunity through guided snow cat ski tours accessing five bowls.
Beaver Creek Resort
Beaver Creek is the seventh most visited ski resort in the United States for the 2008/2009 ski season. Beaver Creek is a European–style resort with multiple villages and also includes a world renowned children’s ski school program focused on providing a first-class experience with unique amenities such as a dedicated children’s gondola.
3) We target hotel, retail and apartment sectors in these markets for the following reasons:
– Hotels: As inflation starts to creep up, and the consumer starts to spend more, these factors along with the barriers to entry for other hotels make the resort markets an exclusive and highly opportunistic play for hotels.
– Retail: Many retailers and landlords have been hit by a shockwave in the resort markets. There are many distressed landlords who are giving properties back to the banks in an effort to save their overall portfolio. This is where we come in. With our ability to source new tenants and to close quickly on owner distressed properties, we can create value from an otherwise dire situation.
– Apartments: As interest rates rise, (which they eventually will), homeownership will become tougher to attain. Combine this with a market where much of the work force is transient, the demand for apartments are strong.
As you look to diversify your portfolio, consider alternative investments as a way to hedge against the ebb and flow of the stock market.
Darren Nakos, CCIM
Resort Realty Capital
111 Main St
P.O. Box 630
Frisco, CO 80443-0630