Q: Over the past few years I have been watching the development of
Intrawest's Juniper Springs Lodge and Sunstone-the first condo hotel
projects in Mammoth, and notice that now that those projects are sold
out and open and operating that there are sure plenty of units back
on the market for sale, how come?
A: First, in the state of California we can't call them condo
hotels for legal reasons, we refer to this type of real estate
product as resort condominium lodge. For those new to this, they are
condominium projects (condominium is a form of ownership) that have
the appearances of a hotel operation. These two projects were
recently built at the base of the old Chair 15 where the new Eagle
Express high-speed six chairlift is and the temporary Little Eagle
base lodge is. These two projects were pre-sold prior to
construction, which is very typical of how Intrawest operates.
There are 250 new units in these two projects ranging in
sizes from studios to 3 bedrooms. All have kitchens and access to
understructure parking, elevators, spas, pool, etc., and most
importantly, direct access to the ski slopes. As of Feb. 1 there were
44 (18%) of these units listed for sale in Mammoth. So you are right,
there are plenty on the market. To find the reason we need to look at
the variety of people who bought into these projects.
The first type of buyer was simply the buyer who had
experienced this type of product in other resorts, probably at
another Intrawest resort, and really liked the idea of owning this
type of property at a slopeside location in Mammoth. Interestingly,
experience has shown that women especially like this type of
property. This represents more of what women like in a vacation or
time off. If you think about it, the Mammoth "weekend warrior"
experience isn't very relaxing-the drive, the schlepping around,
getting up early to face the cold, etc., is not the ideal vacation
for most moms and/or the working woman. But a hotel type experience
(room service, maid service, bell hop, etc.) helps and the fact that
hubby can step out the door and go skiing at any time makes it that
much better.
Intrawest understands this philosophy very well, the Mammoth
of past certainly didn't. So many people bought these units simply
because they have great appeal. Some of these people are sellers
right now, but only because they have purchased bigger or better
units. "Move-up" is a very popular thing with recreationally minded
boomers, whether it is yachts, motorhomes or resort properties.
The other types of buyers were those who are betting on
appreciation and/or revenues-and this is where most of the units on
the market fall. The appreciation has been minor although there are a
few examples of it. The rental revenues by-and-large have been a
disappointment. Back when I was on the M.L. Planning Commission and
these projects were being proposed, Intrawest presented us a rental
survey from some of their other similarly developed properties. Once
up to speed, these units were renting in the 50 to 54% range of
available nights.
As any local reservation company can tell you, it takes time
to develop clientele for a particular property. The delays in
constructing a full-blown lodge with an array of services adjacent to
the site has probably hurt. Some say the "in-house" reservation
company is charging too much. Some think the upcoming air service
will help. Some owners are moving to "off-site" reservation companies
for representation, hoping that their established pool of renters
might like the opportunity to try something different. But all of
this dilutes the quality of the experience for the guest. In the
meantime, owners who bet on the appreciation and revenues are trying
to sell, and that represents the majority of the units that are being
advertised.
Let's look at some other factors. Intrawest is about to start
the sales push for similar units in the Village, which is scheduled
to begin construction in spring. Their sales push will create lots of
exposure, interest and enthusiasm for real estate. Part of the push
is the $30 million dollars slated for improvements in the next couple
of years at the Mammoth airport and the deal the Mountain and
American Airlines have to bring regular air service in soon. With all
of the interest created, these resale units you have inquired about
should become very hot. Why?
The first reason is simply ski-in ski-out. While there will
be a ski-back trail into the Village, the true access will be via the
gondola. True ski-in ski-out will always be the most prized in
Mammoth. Another reason is that buyers won't have to wait two years
or more to enjoy their new property. And while interest rates are so
attractive, all the better. No one really knows what interest rates
will be like two years from now. Then there is simply price. Units in
the Village are going to be even more expensive. Not only do
construction costs keep going up, but Intrawest's expectations are
higher for the Village.
Something I have said before is that the Canadians that come
here that are familiar with Whistler call the Juniper/Eagle Base area
the "Blackcomb" of Mammoth. That is a strong statement. The mini
village of Blackcomb is a short distance from the main village of
Whistler. Quite frankly it represents a more quality experience,
especially for families. While the action of the village is great, it
can be busy and noisy. The Village at Mammoth will be great, but it
won't be for everyone. And once the gondolas are all in place, you'll
be able to ride the gondola from Eagle base to the Village.
A few years ago I questioned many of the Intrawest officials
as to why they would build on their best property first (the base at
Chair 15). They all told me the Village was their best property. I'm
still not sold, and all of those officials have moved on to other
resorts or to other companies. So in the meantime, I see all of those
resale properties in Juniper Springs Lodge and Sunstone as excellent
opportunities to invest in some of the best of Mammoth's future.
As appeared in Mammoth Times, Late Winter 2001 Edition
RE/MAX of Mammoth
Mammoth Real Estate Guide