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Pressured developer auctions off Steamboat condos

CATHERINE TSAI
Associated Press Writer

DENVER – With high-end furnishings inside and views of the Steamboat Springs ski resort outside, The Highmark sold the first of its 23 luxury condos for $3.17 million in 2008 and planned to wrap up sales that year.

It didn’t happen. The developer’s lender failed in August 2008, and credit markets froze following the collapse of Lehman Brothers a month later.

Under pressure from the new lender, The Highmark’s developer will auction off 15 units next month with minimum bids as low as $630,000 – or $407 per square foot, down from $1,185 per square foot two years ago.

“I kick myself, but what can you do,” said Atlanta-area businesswoman Sharon Habibi, who with a friend bought a four-bedroom penthouse at The Highmark for about $3.1 million in 2008.

Economy-driven real estate deals in ski towns can be good for newcomers, maddening for early-bird buyers, but Habibi will be content having more neighbors to chip in homeowners association dues.

“We’re just excited to see them sold,” she said.

Some prices for ski town real estate have fallen 10 to 30 percent from their peak, depending on the market and product, and high-end buyers are looking for bargains, said Dennis Hanlon, president of the Western Mountain Resort Alliance, which represents 13 markets around the West.

Since Christmas, though, activity has picked up along with the stock market, as people who put off purchasing a second or third home reconsider, Hanlon said.

“People still want that dream vacation place,” he said.

Steamboat Ventures Limited says it has invested $300,000 to hold its auction. It’s been pressured to unload its condos since the Federal Deposit Insurance Corp. took over its lender, Integrity Bank in Georgia, in 2008.

Arash Kolahi, a senior vice president of Steamboat Ventures, said the auction will determine the true value of the properties – and quickly.

“Right now, people are looking for a bargain, and unless they think they’re getting a bargain, they won’t buy,” he said. “The best bargain you can give is let them choose the price.”

A buyer willing to buy all 15 unsold Highmark condos at once could get an even better deal, said National Auction Group Inc. President William Bone, who is handling the sale.

The minimum bid for a two-bedroom unit with a den and three bathrooms is $630,000. A similar unit sold for $1.8 million in 2008, Kolahi said.

Kolahi expects the company will lose $15 million on the project. The 15 condos at their original prices had been expected to bring in $30.5 million.

Inquiries on the condos have been about evenly split between Coloradans along the populous Front Range that includes Denver and potential buyers from New York, Atlanta, Dallas and Houston, which have direct flights to Steamboat Springs during ski season, Kolahi said.

Habibi said she stayed at The Highmark, which lets owners rent out units, before deciding to buy in 2008 with her friend.

“We know we definitely paid way over what we would have paid now,” she said with a laugh. “We’re excited for all of them be fully owned.”


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