Suncadia Resort, Roslyn, Washington

Suncadia, previously known as MountainStar, is a new master-planned resort community presently under development on a highly attractive 6,300-acre site in the foothills of the Cascade Mountains, adjacent to the town of Roslyn, Washington. This site occupies a scenic mountainous area, enjoys a dry, “rain shadow” climate, and offers superb access to Seattle—the largest, most affluent metropolitan area in the Pacific Northwest.

Jeld-Wen retained Peterson Economics in July 2002 to complete a detailed market and financial analysis evaluating development potential for all three phases of Suncadia. Since that time, Jeld-Wen and Lowe Enterprises, the new managing partner, have retained Peterson Economics to complete more than 25 follow-up assignments, helping the development team evaluate a wide range of critical issues.

As envisioned, Suncadia will be developed as an upscale, multifaceted destination resort community primarily serving residents of the Central Puget Sound Region, but also serving residents of Central and Eastern Washington and elsewhere. Plans include a striking, mountain-style lodge and resort village, three 18-hole golf courses, a large recreation center, 40 miles of trails, and approximately 3,000 second-home units and homesites.

In order to evaluate market support for Suncadia and its various planned components, Peterson Economics completed the following tasks, among others:

• Met onsite with project representatives to discuss development plans and options.
• Inspected the subject site from a marketing perspective.
• Reviewed pricing, development plans, and reservations taken to date in the Phase 1 portion of Suncadia.
• Researched the local area’s key amenities, climate, and overall attractiveness for resort development.
• Evaluated existing market conditions in the local area for residential real estate, lodging, and other relevant land uses.
• Reviewed current and projected future economic conditions and population growth trends in the greater Seattle area, identified primary sources of potential demand for the various planned components of the community, and evaluated potential demand for new second-home properties by price segment.
• Identified and examined more than 25 selected relevant resorts and resort communities in Washington, Oregon, Idaho, and British Columbia, completing site inspections and detailed interviews with resort managers, real estate sales directors, and directors of golf.
• Investigated proposals to develop other new resort communities or to expand existing facilities in the greater region.
• Reviewed current market conditions and price points in top-tier mountain resorts throughout the western United States and British Columbia.
• Examined the characteristics of the newly emerging fractional real estate market across North America, focusing on a selected list of notable new fractional projects, and developed key implications for Suncadia.

Based on this analysis, subsequent meetings with other team members, and Peterson Economics’ industry knowledge, Peterson Economics formulated a detailed set of development and phasing recommendations for Suncadia and prepared a detailed pro forma financial analysis. Our recommendations addressed:

• Overall market positioning, theming, and image;
• Resort amenities;
• Lodging components;
• Retail components;
• Residential components (type, price, and phasing by parcel);
• Fractional components; and
• Timeshare components.

We completed numerous iterations modeling different densities, market positionings, inter-relations between land use types, and development options, with the broad goal of maximizing the client’s overall return on investment. Our final product has served the client not only as a feasibility study, but also as a working business plan, helping the client to confidently move forward with this extremely complex new resort project.

After detailed analysis and careful consideration, Peterson Economics recommended pricing lots in the $100,000 to $750,000 range and projected first-year absorption at 454 residential units (versus the 68 units of average annual absorption with significantly lower prices projected by a firm previously retained to examine the same project). Real estate sales began in 2004 with lots priced closely in line with our recommendations. Over 500 single-family homesites sold in 2004 alone, representing more than $125 million in gross revenues.

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