This offering is intended for the financially qualified individual and/or experienced builder/developer with appropriate construction and real estate expertise. This investment opportunity implies financial and market risks in excess of the purchase price. Please refer to the disclosure section of this report for required legal disclosures. Subject to prior sale and withdrawl.

Summary

This offering is a time-limited opportunity to acquire an existing home on a large private view lot in one of Aspen’s hottest development areas. The redevelopment potential of this property allows a home of up to 6,512 square feet with space remaining for a tennis court, pool, or other yard amenities on the oversized lot.

The lot and existing house are being offered as a development opportunity for a limited time as the owners are in the preliminary stages of planning its renovation. Preliminary plans envision a 4,000 square foot $2.8 million luxury home which will incorporate the existing ranch house as part of the first floor.

Lot Information

The subject property enjoys an excellent location between Aspen's two golf courses and offers excellent southerly views and sun. Located on a dead-end, cul-de-sac street, the site is one of the most private lots in the subdivision and provides excellent privacy and protection from road noise. Full public utilities are available including water, sewer, natural gas, underground electric, telephone, and cable TV.

Views are excellent in all directions and include southerly views of Aspen Highlands, Aspen Mountain, Buttermilk, and Tiehack ski areas; and Pyramid Peak, Red Mountain, and Hunter Creek Valley to the north. The platted lot size is 1.15 acres of entirely useable level terrain, uncommon for the Aspen area. Two of the homes in the subdivision have private tennis courts.

Existing Improvements

The existing home is a 1,742 square foot 3-bedroom 2-bath ranch home with attached 2-car garage. The original house was built in 1966 and remodeled in 1984. Although the existing house is in average condition, and is currently rented for $2,500 per month, the size of the lot and neighborhood trend suggest that the highest and best use of the property is redevelopment of a much larger home to the luxury standards of the neighborhood

Subdivision History

The Aspen Tennis Club is a large-lot subdivision located on the east side of Maroon Creek, between the prestigious Maroon Creek Golf Club and Aspen’s Municipal Golf Course. In addition to the 14 one-acre lots, there is a jointly owned 7-acre common area along Maroon Creek. Originally platted in 1966, Aspen Tennis Club was fully built-out by the mid-1980s and now, as in other prime Aspen locations, the current neighborhood trend is to redevelop older homes to the luxury market.

Neighborhood and Adjacent Development

Immense public and private investment is occurring in the subject neighborhood, an area which includes the Buttermilk and Aspen Highlands ski areas and both of Aspen's golf courses.

Maroon Creek Club: (adjacent to west) Completion of the prestigious Maroon Creek Golf Club has helped redefine the character of the neighborhood. Contiguous to Aspen Tennis Club to the west, the Maroon Creek Club is an $83 million private golf development, the centerpiece of which is a new 18-hole championship golf course designed by Tom Fazio. One of Colorado’s most exclusive golf developments, the development plan includes 37 townhomes (priced from $2.6-$3.5 million) and 43 single family lots (priced at $1.5-$2.9 million).

Aspen’s Municipal Golf Course: (across Highway 82 to the north) Aspen's 18-hole municipal golf course is a public facility located across highway 82 from the Aspen Tennis Club.

Aspen Highlands: (1 mile south) Base facilities at the Aspen Highlands are currently being redeveloped by the Hines Company with multi-million dollar townhomes.

Moore property: (adjacent to south) The Moore property directly south of the subject currently consists of one single family dwelling on large acreage. Portions of the Moore property adjacent to Aspen Highlands and Meadowood subdivisions are currently being developed as the Moore PUD. No development is currently proposed for the portion of the Moore property adjacent to the subject.

Public recreation and open space: (1/2 mile south) New recreational facilities planned or under construction at Aspen’s Maroon Creek School Campus include: a new hockey rink and swimming pool; playing fields for softball and soccer; and a skier overpass which will link the campus to Iselin Park.

Low-density single family: East of Aspen Tennis Club Subdivision there are several small single family subdivisions of similar character.

Target market

The target market for the subject property is to both developers and owner-occupants:

Developers will be interested in: the property's streamlined developability by virtue of the existing house; the option to utilize most of the existing home as an economical base for renovation; and rental income to offset holding costs while the project is being planned and approved.

Potential owner-occupants will have an immediate housing opportunity with significant upside land investment potential due to market appreciation and neighborhood upgrading.

With townhomes in the neighborhood selling for $2.6 to $3.1 million, and smaller single family lots selling for over $1.5 million, this redevelopment opportunity is priced at a small fraction of the prevailing price level of housing in the fancier subdivisions. Assuming cost-conscious renovation, redevelopment of the subject property could potentially be accomplished at a cost basis almost $1 million below comparable product in the fancier neighborhood subdivisions.

Single Family Market Analysis

Based upon the accompanying market analysis, retail market value of $700 per square foot appears reasonable if the subject property were redeveloped into a 4,000 square foot 2-story contemporary home. This would put the retail value of the renovated home at the competitive price of $2.8 million, slightly below the median price of homes currently on the market. Although a larger home could potentially be built on the property, and market data is available which supports an even higher listing price per square foot, the home size and value selected appear reasonable in context of other homes in the neighborhood, and analysis of per square foot values with respect to property size and age in the Aspen market.

Current listings in the subdivision include an adjacent property to the south at $1,595,000 (now under contract) and a property to the north at $1,695,000. Historical sales include the adjacent house to the north which sold in 1997 for $1,970,000 after renovation.

Comparable Lot Prices

High quality single family building sites are extremely rare in Aspen. As of August 24, 1998 there were 51 single family building or redevelopment sites listed in the Aspen MLS at prices ranging from $695,000 to $4,900,000. As a single family development site, the subject property compares favorably with other sites priced up to $2 million.

Zoning

The property’s R-30 zoning requires a minimum lot size of 30,000 square feet and a maximum floor area ratio of 13%. Based upon the lot’s platted size of 1.15 acres, a home of up to 6,512 square feet appears to be allowed under existing zoning.

Redevelopment Plan

The most economical approach to redevelopment of the subject property is to incorporate the footprint of the existing home as part of a larger 2-story contemporary dwelling. Preliminary architectural engineering suggests that the existing foundation and perimeter walls could support a second story with minimal structural renovation or damage to existing interiors. (Subject to specific design and construction plans.)

Development Issues and Economics

Necessary development approvals appear to be readily obtainable and include the following:

Subdivision Architectural Committee: Redevelopment plans for the subject property will be subject to architectural review by the homeowner association architectural control committee.

Scenic Overlay Review: The subject property is located in a scenic conservation area that may require review of development proposals for the property. However, because the subject property is not located on a ridgeline and is barely visible from the highway, an administrative sign-off may be possible. When the adjacent home to the north was renovated, a scenic review was required and the redevelopment proposal was approved.

Sewer Tap Fees: The subject property is currently served by an individual septic system. Expansion will require connection to public sewer that is available in Maroon Drive near the lot line. According to a telephone inquiry with the Aspen Metropolitan Sanitation District, total connection fees of approximately $4,600 would be required for the existing dwelling. Fees for a larger home would be somewhat higher and depend upon the specific development proposal.

Building Permit Review: Building permit application and approval is under the jurisdiction of Pitkin County rather than the City of Aspen.

Renovation costs in the Aspen area vary widely depending upon the nature of the project. Economical redevelopment of the existing house may be achievable from $150 to $200 per square foot, but actual costs may vary significantly based upon the project's specific design, specifications, and workscope.

The accompanying market analysis provides a comprehensive overview of the Aspen housing market in late August 1998. Based upon this analysis, a retail value of $700 per square foot may be reasonably expected for the subject property after renovation. Although a home of over 6,500 square feet may be allowed based upon the size of the lot, assuming a relatively conservative home of 4,000 square feet, market value of $2.8 million ($700/sf) may be forecast for the subject property after renovation. Assuming $200 per square foot in renovation costs and full real estate commissions of 6%, the economics of redevelopment are forecast roughly as follows:

The cost and revenue estimates presented above are not guaranteed by the seller or brokers. All property redevelopment is subject to uncertainty both from factors both known and unforeseen. Interested parties are advised to seek independent analysis of the estimates and projections presented above in order to adequately evaluate this investment opportunity.

Disclosures, Disclaimer and Due Diligence

As required by Colorado law, the listing broker hereby discloses he is an owner of the listed property and a licensed real estate broker and appraiser in the State of Colorado. The information contained herein has been assembled from sources deemed reliable, but this information is not guaranteed. Potential purchasers should verify all information contained herein, and shall be responsible for their own personal due diligence.