Buttermilk hotel now up for sale
ASPEN Its just a matter of time before the only hotel at Buttermilk changes hands.The commercial portion of the Inn at Aspen has been on the market since last summer and is listed for $6.5 million, said Mark Wyman, managing broker with the Aspen/Snowmass office of the Fleisher Co., the real estate firm marketing the property and acting as the sellers agent.The owners of the Inn at Aspens commercial operations, B&B Properties, owned by Dick Bradley and David Baggerman, lease the property to Nashville, Tenn.-based ResortQuest, a property management firm that operates the commercial aspects of the hotel, that includes the Elk Horn Bar and Grille, front desk operations, the lobby, the laundry and other services. The commercial portion encompasses 11,543 square feet.The property we are offering for sale includes everything that is required for the hotel operation, Wyman said.ResortQuest pays $301,000 a year to B&B Properties. There are 11 years left on the triple-net lease, under which taxes, insurance, common area maintenance fees and association assessments are paid by ResortQuest. ResortQuest pays 100 percent of the commercial operations expenses.Prospective buyers would be guaranteed that income stream, Wyman said.The current rate of return of 4.64 percent, which increases every year in accordance with the Consumer Price Index per the terms of the lease, appears to be an attractive alternative to buying a 10-year treasury bond that yields 3.65 percent today, particularly given that treasuries do not have the potential for property appreciation that the Inn at Aspen could enjoy, Wyman said.The sellers, who have owned the property for decades, are ready to hand over the reigns to a new investor.My clients have been involved with the Inn at Aspen for decades and have been wonderful stewards to that property, Wyman said. And recently, their financial advisors have urged them to consider and enact a plan of asset diversification and reallocation.Bradley and Baggerman managed the hotel in the 1970s when it was a Holiday Inn. Bradley was the general manager and Baggerman served as the hotels chief financial officer. The hotel was condominiumized, and B&B Properties bought the commercial portion in 1987.Wyman said hes had several prospective buyers look at the property, and in one case, it was under contract but the deal fell through because the party couldnt secure financing.Built in 1969 and remodeled in 1989, the hotels 124 residential units are controlled by 80 owners and represented by the Inn at Aspen Condominium Association Board of Managers. ResortQuest also manages the condos, which are not for sale.Dick Frye, president of the association, said the majority of the residential owners want to redevelop the property and plans are in the works.How those plans will be affected by the sale of the commercial space is unclear. Frye said its assumed that the new buyer would continue with ResortQuests management of the property under the current terms of the lease.We would expect business as usual, Frye said of the commercial sale, adding the redevelopment of the condos and the development of eight acres the homeowners association (HOA) owns around the Inn at Aspen is in the preliminary planning stages. The Inn at Aspen sits on two acres, also owned by the HOA.The board wants to redevelop and I think 90 percent of the owners want to as well, Frye said, adding B&B Properties owns one condominium at the Inn at Aspen. B&B Properties is part of the association and is very much in the camp that wants redevelopment.For the past year, Frye said the HOA has been working with the Aspen Skiing Co., which also owns land at the base of Buttermilk. Stan Clauson Associates, a local planning firm, has been hired to help design a new development. The association is close to making a deal with Bald Mountain Development LLC, a mixed-use development company based in Aspen, to be a partner in the project, Frye said.Bald Mountain Development is an umbrella company that oversees separately created entities for each project under management. Under the name of Four Peaks Development, Bald Mountain developed the Hyatt Grand Aspen timeshare hotel. The company also developed the luxury residential subdivision and townhomes at the base of Aspen Mountain under the name Top of Mill. Bald Mountain also redeveloped the Bavarian Inn, which is deed-restricted affordable housing in Aspen. Serving as an owners representative, Clauson keeps the HOA board informed of issues and opportunities throughout the redevelopment process, and in conjunction with Design Workshop, Inc., is working to create a redevelopment plan that will meet the facility and financial needs of both the Inn at Aspen owners and the Skico. That includes a more efficient, cohesive site plan that will allow for a new flagship hotel, greater commercial opportunities, and the continued ability to host major events, such as the Winter X Games.Clausons firm will take the redevelopment application through the entitlement process. The Inn at Aspen and Buttermilk Mountain are located just outside of Aspens city limits in Pitkin County. The partners also are analyzing the potential benefits of annexing the property into the city and will facilitate that process on behalf of the HOA board.As the only hotel at the base of Buttermilk, the HOA board and the Skico believe that the aging structures there do not fully utilize the site nor do they meet the expectations of the ski resort guests.[The Skico] has big plans there and weve been working with them, Frye said. Its not going to be just a new hotel.Its planned that the commercial portion of the hotel would be traded for residential property, the value of which would be determined by a land appraisal, Frye said.The plan is when the redevelopment takes place, the owner would receive residential units in place of the commercial, he said, adding if the commercial property doesnt sell before the redevelopment, B&B Properties could take the residential offering in place of the commercial units. However, the sale of the commercial property is not contingent upon the redevelopment, and vice versa. Its the homeowners association that wants to move forward, but it has to be in conjunction with B&B Properties or with a new owner, Frye said.The property featured on http://www.thefleishercompany.com highlights the maturity and security of the net income generated by the property and the potential for an additional reward to buyers upon future redevelopment, which could occur in the next five years, Wyman said. email@example.com
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