Originally published May 7, 2012 at 10:23a.m., updated May 8, 2012 at 09:16a.m.
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Steamboat Springs Editor's note: This story has been updated from its original version to include additional information about the auction and an updated number of winning bids and aggregate sales.
An auction of unsold Trailhead Lodge condominiums featured as many as 24 winning bidders and aggregate sales potential of $9.2 million, encouraging local Realtors who represented bidders that the auction could stimulate more sales.
Cam Boyd, of Prudential Steamboat Realty, said the auction bids, which were below the replacement cost of the condos, could lead to more sales at Trailhead Lodge and in the broader market — if the units auctioned Sunday actually go to closing.
“I don’t think it will just be a trickle,” Boyd said, “I think it will be a good flow of people.”
He expects people who have been watching Trailhead Lodge but weren’t comfortable with the auction process to begin to take action in the wake of Sunday’s auction at a downtown Denver hotel. The auction also was available to qualified bidders online.
Boyd represented two clients who were winning bidders and had their bids accepted by the owners of the project, Silverleaf Financial. He said both clients already own homes here and bought condos as investments with the bonus that they will be able to use Trailhead’s amenities, including the people-mover gondola and owners’ ski lockers, as well as house personal guests.
Jon Wade, of Colorado Group Realty, said the bidding was fairly hot on two-bedroom units with dens that attracted bids of as much as $557,000. Those units originally were listed for sale in 2009 for a little more than $1.3 million. They carried opening auction bids this weekend of $335,000.
“This is good for the Steamboat market because this announcement provided some level of uncertainty in the condo market. Now that they are selling, supply will be reduced and it represents more condos selling in a brief period than we have sold of similar types in a long time,” Wade said. “On a higher level, it is a sign that people are still interested in owning in Steamboat and are capable of doing so.”
An email Tuesday morning from Kennedy Wilson Auction group confirmed that there were 24 winning bids totaling $9.17 million. The news release stated that bidders participated from 15 states as well as Bermuda and Brazil.
David Baldinger Jr., of Steamboat Village Brokers, said it’s important to keep in mind that some of the 24 winning bids likely did not meet the owners’ reserve price and could have been rejected. That would give the owners five days to come back with a counter offer. None of the auction sales are final until they close in 45 days.
But Baldinger felt that if the auction process leads to a substantial number of closings, it will have established a useful sales record for Trailhead Lodge going forward. And that could make more buyers comfortable.
“The prices of the winning bids were very similar to what I’d expect market-rate prices to be,” Baldinger Jr. said. “The number of people who were interested was a good sign. What I don’t know is if the prices were acceptable to the sellers. It’s definitely a positive if a good number close.”
He placed per-square-foot prices for the two-bedroom units at $330 to $370.
Boyd said he has worked with clients who were looking at a variety of properties but have hesitated to buy because they didn’t want to miss out on a bargain at Trailhead.
“There are a lot of people who knew that Trailhead would come forward with lower prices at some point,” he said.
Kennedy Wilson Auction group announced in April that 39 Trailhead Lodge condos would be offered at auction, but Wade said 19 condos were offered in the first round of bidding with 15 more in the second round, for a total of 34.
Baldinger Jr. said the auction house grouped similar units into pools and auctioned them together, allowing bidders who were interested in a specific two-bedroom unit to bid at a premium for the right to choose their unit. Those who were less particular about which two-bedroom unit they tied up could drop into the next round of bidding and save $20,000.
Wade said it was difficult to estimate how many people took part in the auction because of its online component and the presence of Realtors at the downtown Denver hotel. However, he guessed there were as many as 60 bidders Sunday. Boyd put the number as high as 70.
Trailhead Lodge was completed in 2009, but by the time developers Resort Ventures West was ready to deliver finished units, the real estate market had turned down dramatically and many of the pre-construction contracts did not turn into closings.
Trailhead Lodge is managed for short-term rentals by Wyndham Vacation Rentals.
Salt Lake City company SilverLeaf Financial acquired the six-story Trailhead Lodge building and the remaining 58 unsold condos through foreclosure proceedings last year. SilverLeaf purchased the outstanding debt of $57 million from Bank of America for the discounted price of $28 million.
SilverLeaf notched its first sale under the restructured price list with the $715,000 sale of a three-bedroom unit in December 2011. Encouraged, the new owners put another unit on the market for $800,000, but the sales effort carried little momentum into the New Year and activity had been very quiet since.