Ski Business Not As Bad As You Think & CBMR Owner On a Shopping Spree

Seems like all we hear about these days is news of ski resort failures, declining skier visits and global warming killing winter but according to a recent industry report, the U.S. ski industry continues to rack up revenues. Ski resorts in the United States have shown steady increases in revenue over the last five years, according to research firm IbisWorld.  The New York Times ran an article recently about the results of an IbisWorld report on the state of the United States ski resort industry.  Interestingly, in 2009 the U.S. ski resort industry reached $2.6 billion in revenues.  IbisWorld is forecasting a 6% increase for 2010 – or $2.72 billion in revenues. The ski industry’s biggest players – Intrawest and Vail Resorts – now attract 51 percent of the total U.S. ski industry market in terms of revenue.

In what appears to be either a brilliant stroke of luck or a saavy business tactic, the Muellers sale of Crested Butte Mountain Resort a little over a year ago to a very big real estate investment trust (REIT) might go down as their most important move in positioning our ski resort for success when the economy turns around. CNL Lifestyles Property Inc. (CNL) bought out all three ski resorts owned by the Mueller family including Okemo and Mt. Sunapee in Vermont for $132 million just as the U.S. financial markets were tanking.

Crested Butte owner CNL is back in the news with more big time investments.  Their latest round of acquisitions occurred this month. This time, CNL bought four marinas in California from the existing operator for $55 million, expanding the REIT’s marina portfolio to 19 locations. Orlando, Florida-based CNL leased the four marinas, which have a total of 1,984 boat slips, to it’s former owner which will continue to operate them under long-term, triple-net leases.

The Muellers operate Crested Butte Mountain Resort, Okemo and Mt. Sunapee in a similar “lease-back” arrangement.  CNL owns it and the Muellers operate it under a long term lease agreement.

Recently, CNL completed more than $23 million worth of improvements at their Cypress Mountain ski resort in Vancouver, B.C., just in time for the 2010 Olympic Winter Games. Cypress Mountain was the host for six 2010 Olympic events, including three skiing and three snowboarding events. The improvements had been planned for many years and were prioritized when CNL purchased Cypress Mountain in 2006 for $47.5 million.

A REIT is basically a holding company. The IRS sets the following requirements for a company to qualify as a real estate investment trust:

1. Invest at least 75 percent of its total assets in real estate.
2. Get at least 75 percent of its gross income as rents from real property or interest from mortgages on real property.
3. Distribute at least 90 percent of its taxable income to shareholders annually in the form of dividends.

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Research Properties on the Gunnison/Crested Butte MLS

Channing Boucher

Benson Sotheby’s International Realty
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