Vail and Beaver Creek Properties
Financial Performance
Vail has been and will always be a capital appreciation investment as illustrated by the Compounded Average Growth Rate which has been 3%-5% annually over the past 29 years. The upside is dictated not so much on what you buy or how much is paid but on the successes or failures of Vail & Beaver Creek as places which are proven playgrounds for the rich and not so famous. See our Latest Interactive Statistical Report.
The appreciation drivers are multi-faceted so think of these elements as a three legged stool.
1. Population demographics. One quarter of all WWII conflict nations which is about two-third of the planet, are baby boomers who are now 56-74 years old. The Great Recession postponed retirement for most of us by about 10 years with boomers still working but thinking about the day when they don’t have to. Average age of a Vail buyer is in their 50’s because it’s so expensive with plenty of demographic demand to come for vacation/retirement home property.
2. Affluency of customer base. The top 10% of US households control about 88% of all investible assets according to the Wall St Journal. Concentration of wealth will continue while the middle class is being hollowed out which is unfortunate but true nevertheless. The key is to find places that are of interest to those moneyed families who desire unique legacy assets that are also safe harbors for capital. The rich can always make more money but what they can’t make is more time resulting in a focus on “best of the best” experiences which is what the Vail Valley is all about.
3. Ski company. If you want to know what the future is going to be; study the ski company. If the skico creates more demand for their products, goods, and services the local economy will prosper. If the operating company hurts demand and or tarnishes the brand as happened in Steamboat Springs when 1000 employees were laid off property values and vibrancy suffers. Vail Resorts is the best managed, best capitalized and most successful ski operating company in the world and a Fortune 1000 company. Their success formula is based upon massive investments in infrastructure and the creation of a lifestyle where lift tickets are now just one a many available activities. After a multi-billion dollar private/public investment spree which started 2004, Vail has reinvented itself as the company’s crown jewel with an international reputation for being a playground for the rich and not so famous which is only going to grow in the years ahead.
Our goal is to achieve double digit returns while creating experiences and memories that last a lifetime. Financial performance for best buy opportunities reimburse all negative cash flow expenses, remodeling costs and transaction expenses with enough remaining appreciation for 10%-20% annualized arithmetic returns.
