Developer Scott Bradley sold 162-unit Eagles Nest Apartments to Masayuki Tsukada for $13.5 million
When Scott Bradley bought the 162-unit Eagles Nest Apartment complex in 2007, people raised their eyebrows: $3 million for a nearly 50-year-old complex in up-and-down Leadville that had seen little investment over the decades?
The veteran developer just sold Eagles Nest, one of the largest apartment complexes in the Colorado high country, for $13.5 million to a Japanese investor he never met. Cash deal. Closed in less than a month.
After years of investing and fighting for approvals to develop in Grand County and Central City, Bradley struck it big in Leadville.
“When it’s easier to make money in Leadville than it is in Grand County, something is wrong,” said Bradley, who sold majority interest in long-dormant, 688-acre Ski Idlewild ski area in Winter Park to community developer Buz Koelbel in 2007 and still has a 95-acre parcel slated for homes near Tabernash. “I don’t think anyone saw this coming.”
Eagles Nest was built next to the Climax Mine in 1952 for miners. The mine moved the buildings to Leadville in 1960, where they became an enclave of low-income one-, two- and three-bedroom units spread across nine buildings. The boom-and-bust cycle of mine-dependent Leadville took its toll on the complex as previous owners weathered foreclosures and downturns.
Bradley invested in the complex and waded through Lake County approval to convert the apartments into for-sale condos. That was his play: Buy a unit for $20,000, secure local approvals, spruce it up and sell it as a $60,000 condo to buyers shying from the exponentially more pricey condos in nearby Vail, Summit County and Copper Mountain.
But when tourism revived in the nearby ski towns and Leadville became a sleeper community for resort workers in Vail, Breckenridge, Frisco and Copper Mountain, occupancy at Eagles Nest climbed to 90 percent from 50 percent, with average rents doubling to $900 per month after upgrades and new management. He saw worker housing as a better option. More than half of his tenants commute to ski town jobs down the hill from Leadville.
He tried to offer the property to Vail Resorts as a way to ease the housing crisis in towns supporting the company’s resorts in Eagle and Summit counties.
“They wouldn’t even a return a phone call when they were told it was in Leadville. Vail doesn’t want anything to do with Leadville, which I don’t get because it’s not that far away,” Bradley said, referring to the 45-mile trip between the cities.
So who is the mystery buyer? A Japanese investor with an LLC, Bradley said, rifling through papers to find the settlement sheet. Never met the guy and never talked to him, Bradley said. The buyer’s name is Masayuki Tsukada, and he’s president of Tokyo-based Tsukada Global Holdings. The company reported $778.3 million in assets and a net income of $37.6 million from $521.9 million in revenue at the end of last year, according to its earnings report.
“One of the weirdest deals we have ever done,” Bradley said. “They put it under contract. Earnest money arrived the next day. It was a quick close, in less than 30 days. Cash. Everyone told me it wasn’t going to happen; this is not the way you buy real estate. I wish I had a few more deals like that. It’s like I’ve always said: When it gets hot in the mountains, it gets hot.”
Watch for more investment in Colorado from Japan, said Dick Clark, a Denver business lawyer who regularly travels to Japan to promote Colorado to investors and who serves as senior vice-president of the Japan America Society of Colorado. He said two decades of work to educating Japanese investors about Colorado is paying off.
There is a growing interest in Colorado among Japanese investment firms, said Clark, who does not know Tsukada Global Holdings. Panasonic’s investment in the new “smart city” outside Denver International Airport is only the latest sign of Japanese interest in Colorado, Clark said.
“I’d love to see them invest here. Japanese investors are usually long-term players. They will come and spend the money and take the time and effort to grow their investment,” Clark said.