The partnership that owns the Garden of the Gods Club is putting the property’s amenities on the market as it prepares for land values to rise before homebuilding efforts begin in earnest.
Sunrise Co., based in Palm Desert, Calif., partnered with local Thomas Schmidt LLC to purchase the club from Dallas-based Hill Development Corp. in 2007. The partnership paid $24.75 million for the property, which includes a 27-hole golf course, 43,000-square-foot main building, 66 guest rooms, a recreation center and 21,000-square-foot golf clubhouse.
Those facilities will go on the market. The partnership is looking for a broker and hasn’t named a price.
Sunrise has developed 15 resort communities throughout the country, and Garden of the Gods Club is outside of the company’s normal range. It’s the first community Sunrise ever bought into that it didn’t start from scratch on its own.
But Dirk Gosda, president of Sunrise’s Colorado Division, said it was so well-positioned that Sunrise saw a promising investment.
“Our main business has always been homebuilding,” Gosda said. “We create the club and the lifestyle and the amenities, by and large, to sell houses.”
When the partnership sells the club amenities, they will be separated from about 300 acres of undeveloped land that Sunrise can build on. The Kissing Camels development and surrounding land were master-planned for 1,000 units, Gosda said. There are currently about 500 homes inside the Kissing Camels gate.
“We think we have a little over 500 left to go,” he said.
Sunrise decided not to start building after it bought the property in 2007 because company leadership “didn’t like the way the future looked,” Gosda said.
They instead invested in the amenities and the club, building up membership and the number of visitors.
“The reason we decided to sell the club at this time is because it’s doing well,” Gosda said. “We’ve improved the business every year we’ve owned it. Our occupancy was around 20 percent when we bought it. It was 55 percent last year.”
That means Sunrise has added value to the club operations and should be able to sell at a fair price.
In the meantime, the partnership will focus on preparing for future homebuilding efforts. The company broke ground last year on its new Cathedral Ridge development near Kissing Camels, and closed on 15 home lots in 2012 and another five last week.
“But if you look at what Sunrise does — we’re a much higher-volume developer than that,” Gosda said. “We’re not geared up to do 12 houses a year.”
Because the market for higher-end homes is recovering more slowly than that for homes priced between $150,000 and $300,000, Gosda said he expects Sunrise to wait before ramping up development.
“We’re a private company,” Gosda said. “And private companies are all about how much money you make, not how fast. It’s easier for us to sit on land than it is to build slowly. It’s an infill project and we think the land value will come back.”