Water easily triples ranch prices
PHOTO: “Castle Peak Ranch” in LOCAL NEWS BASEVIEW
Sale of the Castle Peak Ranch for $23 million illustrates more than anything the shifting value of water on ranchlands in the Colorado high country.
The 10,300-acre ranch purchased by London-based investment banker Peter Weinberger has no irrigated land. Its primary waterway, Eby Creek, flows only two or three cubic feet per second of water by late summer. The value of the ranch for raising cattle is only in summer. As such, purely as a cattle ranch, the land is probably worth something less than $2,000, the going rate for good, cattle-producing land.
In fact, former owner Jessica Cato got something more, $2,240 an acre. This heightened value is, by all accounts, due in large part to its location within the Eagle Valley and all that comes with it – easy air and highway access, plus top restaurants, music, and all the rest.
Plus the ranch has “spectacular” views.
“You could see the whole world up there,” says Joan Harned, an associate broker at Black Bear Real Estate, which co-listed the property. “You could watch the Avon fireworks on the Fourth of July from their cabin.”
But other ranches with less exquisite views are getting $4,000, $8,000 – even up to $35,000 an acre. Why not the Castle Peak Ranch?
In a word – water.
“It’s very important. It’s almost a requirement,” says Tim Casey of Breckenridge-based Mountain Marketing Associates. He and other real estate brokers specializing in resort ranches say that to get top dollar, a ranch must also have shimmering bodies of water that evoke images of the actor Brad Pitt snagging trout in the move “A River Runs Through It.”
“It’s rare to find a river without a road or a railroad along it,” explains another real estate broker.
In the Blue River Valley, between Silverthorne and Kremmling, larger ranches with such glistening, gurgling stretches of river not attached to highways range in price from $10,000 an acre to a high of about $35,000 an acre, says Casey. The latter is for ranch parcels of fewer acres.
“There are exceptions,” he adds. “If it’s all sage, if there is no water and no trees, it’s going to be $3,000 to $5,000 an acre,” he adds.
Supply easily outstrips demand near resorts, which has brokers – and ultimately buyers – looking ever farther afield. But the “look” has to be just right.
Despite its proximity to Breckenridge, Casey’s firm doesn’t deal in South Park ranches. A key problem, he says, is that ranches there long ago were separated from water rights.
But steadily gaining favor are ranches along the White River, east of Meeker. Financier Henry Kravis and golfer Greg Norman have ranches there. Prices range from $2,000 an acre to $6,000 an acre. “The fishing on the White River is some of the best fishing in Colorado,” says Casey.
In the Roaring Fork Valley, the few remaining ranches have hit astronomical prices. The 650-acre Guber Ranch near Aspen recently was sold for about $70,800 an acre. In Wyoming’s Jackson Hole, H. Ross Perot recently put a 1,500-acre ranch under contract, with the intention of subdividing it into 35-acre or larger parcels, with houses located along the periphery of the working ranch. The property had been listed at $110 million, which works out to be $8,461 per acre.
Access, however, is almost more important than the look. Somebody who has $10 million to $20 million rarely flies commercial.
“They have to be within an hour of where you can land a good-sized airplane,” explains Casey.
That puts the Eagle Valley near the top of anybody’s list, with Aspen close behind.
Recreational ranchers also want to be near activities, including good restaurants.
What this all means for the ranches of Derby Mesa in northern Eagle County is not entirely clear. They have scenery to die for, meadows plush with green in spring in summer, and creeks as the center-piece jewels.
“They have all the parts and pieces that people ask for,” says Dick Kessler, who is associated with Slifer, Smith & Frampton Real Estate.
Well, maybe not quite, says Casey. “It’s pretty far out there,” he says. He imagines an infrastructure being built to accommodate recreation ranch buyers if Derby Mesa’s existing owners ever leave the business of selling cows.
If that day comes, Casey doesn’t foresee much subdividing, if any. Casey says of the ranch buyers he deals with, they are not developers, but instead would prefer to be known as “conservationists.” He is encouraging, and some are agreeing to, put deeds on their property that restricts future development.
Whether or not that happens at the Castle Peak Ranch is not known, but Kessler, who has been handling ranch real estate in the Eagle Valley area since 1986, applauds both the sales price and the buyer. “He paid exactly what he should have paid for it,” says Kessler, of Weinberger’s $23 million price. The ranch had been privately shopped for $56 million several years ago.