Colorado Real Estate Journal - May 6, 2015
When Fred Kummer first started assembling the land for Adam’s Rib Ranch in the Vail Valley in 1973, he envisioned creating a ski resort that would draw 9,000 skiers daily with 1,000 residential units. Almost 20 years and $30 million later, Kummer, the founder of the St. Louis-based HBE Corp., threw in the towel on the ski resort, after making the investment, after tiring of knocking heads with Eagle County residents who opposed it. He also had to deal with a lot of government red tape. “I got tired of dealing with the government. It’s an impossible organization to do business with,” said Kummer, who also developed what was the Adam’s Mark (now a Sheraton hotel along the 16th Street Mall) told Rocky Mountain Business Editor Rob Reuteman in 1994. Instead of a ski resort, Kummer scaled back the size of the plan and changed direction, turning Adam’s Rib into a golf community. It wasn’t cheap. He invested another $70 million into the project. Last month, he sold it. The price wasn’t disclosed, but records indicate that a Denverbased investment group led by Chad Brue of Brue Capital Partners, along with Vail-based entrepreneur Dan Bennett, owner and operator of Southwest Greens of Colorado, paid $21 million for it. Brue Capital took out an $11 million loan from FirstBank for the purchase. Adam Sands of FirstBank handled the loan for Brue. Kummer in a recent interview admitted that Adam’s Rib wasn’t the best investment he ever made. “I put a lot of money into it, and I sold it for a little bit of money,” Kummer told the St. Louis Business Journal. “At my age, I had decided that I played around with the toy long enough – that’s an expensive toy, $100 million, so I disposed of it,” Kummer added. Eric and Martin Roth were part of the CBRE team that listed, marketed and sold Adam’s Rib on behalf of Kummer. “He was getting up there in age - I think he is in his 90s - and he kind of wanted to wind down and relax,” Eric Roth said. “Plus, living in St. Louis, it was becoming more of a challenge for him to travel to Colorado,” Roth said. There was a great deal of interest from prospective buyers, Roth said. “We had a significant amount of interest from all around the country,” Roth said. There were institutional buyers, private equity firms and resort operators interested in the 2,665- acre spread. They even received inquiries from buyers in Canada and Asia, he said. He estimated about half the prospective buyers were from Colorado and half from outside of the state. The property includes the private Adam’s Mountain Country Club with an 18-hole, championship Tom Weiskopf designed golf course, a 40,000-square-foot clubhouse and five member cottages, and 97 multi-acre sites with five spec homes. The property also includes a 1,000-acre working ranch and a 500-acre future equestrian center. Eric and Martin Roth would tour the golf course in carts with prospective buyers “and then we would hop in a pickup truck” to show them the rest of the property. “I tell you, everyone who looked at it had the same reaction,” Eric Roth said. “They were all amazed just how stunningly beautiful it is,” he said. “Honestly, the photos of it don’t do it justice. You really have to see it firsthand to appreciate it.” Brue Capital Partners, headquartered in the historic D&F Clocktower building in downtown Denver, outbid some pretty big players, according to Roth. “Chad (Brue) really wanted it,” Roth said. “I believe he told me, when we were taking the tour he had golfed there once. He put together a really good package to buy it, although I signed a nondisclosure agreement, so I cannot disclose or talk about the price.” In addition to the land, Brue also purchased the water rights. “The water rights were a very important component for people looking at the property,” Roth said. “Fred Kummer did a beautiful job of securing all of the water rights,” he said. At first blush, it may seem outside of Brue Capital’s wheelhouse to buy Adam’s Rib. To date, Brue Capital’s highest-profile project is The Lab, a 77,500-sf, LEED-certified building it is developing that is scheduled to open soon at 17th and Platte streets between LoHi and downtown Denver. It also owns about a dozen warehouses in Colorado with a total of about 412,000 sf. All of the warehouses are in Denver, with the exception of one in Colorado Springs. It also owns the Chateaux Verde Apartments in Lakewood. According to its website, Brue Capital is seeking value-add apartments, industrial properties and select office buildings. As far as apartments, it is focusing on acquiring buildings west of Interstate 25 that have 50 units or more and were built in the 1970s or 1980s. It also is looking to acquire industrial buildings constructed in the 1970s and 1980s with high vacancy rates, or even completely empty. Brue is seeking industrial properties that range in size from 10,000 sf to 50,000 sf. Currently, its industrial properties in Colorado range from 13,537 sf to 68,800 sf. As far as office buildings, it is seeking properties with deferred maintenance, high vacancy rates and environmental problems that range in size from 25,000 sf to 100,00 sf and were built in the 1980s or 1990s. Still, Roth thinks that Brue will be a fine owner of Adam’s Rib. Brue has “assembled a quality team who will undoubtedly serve as excellent stewards of the property going forward.” Frost Creek is the new brand for Adam’s Rib, paying homage to W.E. Frost, a settler on the property in 1880 and the name of the creek that bisects the property. “We are excited to launch Frost Creek and share all that this extraordinary property and club have to offer,” Brue said in a release.