The Real Deal New York

Gary Barnett hits the slopes in search of a new market

Extell president quietly buying acreage outside Park City, Utah, for hotel-condo project

May 24, 2016 07:30AM
By Rich Bockmann

The slopes at Deer Valley (inset: Gary Barnett) (credit: Well Plated)

The slopes at Deer Valley (inset: Gary Barnett) (credit: Well Plated)

Riverside South. Billionaires’ Row. Two Bridges. Park City … Utah? Gary Barnett, one of the biggest names in New York City real estate, is bringing his glitzy touch to the powdered hills out west.

More than 2,000 miles away from his offices on Third Avenue, the Extell Development president has been quietly buying up acreage just outside Park City for a hotel-condo project near one of the area’s expanding resorts, The Real Deal has learned.

In January 2015, BarnettTRData LogoTINY bought about 40 acres adjacent to luxury Deer Valley ski resort just outside Park City, property records in Wasatch County show. (Utah is a non-disclosure state, so the purchase price was not revealed.)

Barnett purchased the land from Van Hemeyer, a Wasatch-based investor who bought the property in 2010 and two years later secured approvals to develop a hotel on the site and roughly 200 condos.

“It’s a straightforward project,” said Steven Hooker, an investment-sales broker in Cushman & Wakefield’s Park City office, noting all the approvals are already in place.

Van Hemeyer told TRD he is working for Extell, but declined to comment further. A representative for Extell did not respond to requests for comment.

Utah ski country may seem a world away from the gleaming condo projects Barnett is developing near Central Park and on the Lower East Side, but the area does present opportunities that are become increasingly elusive in Manhattan’s tightening market.

Salt Lake City was among the top five secondary markets in the country to see cap rates compressing last year as diversifying capital becomes increasingly more comfortable investing in smaller markets, according to JLL’s first-quarter investment report.

And while luxury sales declined 5 percent last year in Manhattan, luxe sales were up 45 percent in the sporty resort town of Jackson Hole, Wyoming, according to Christie’s International Real Estate.

Industry observers said that as buyers get priced out of places like Jackson Hole, the Park City area becomes more attractive.

“We see a lot of New York and New Jersey people coming out our way,” said Steve Blankenship, a broker with Keller Williams in Park City. “There’s going to be a lot more development going forward next 20 years.”

Barnett’s timing coincides with a major planned expansion of the Deer Valley resort, and the developer known for his ability to put together complex assemblages appears to have more in mind himself.

A map of the Deer Valley area near Park City, with the approximate location of Barnett's site outlined in red.

A map of the Deer Valley area near Park City, with the approximate location of Barnett’s site outlined in red.

Deer Valley is a snowboard-free resort that hosted the slalom, aerial and mogul events during the 2002 Salt Lake City Winter Olympics. The resort includes two of the area’s five-star hotels: the Stein Eriksen Lodge and the St. Regis Deer Valley.

Sources said Barnett is considering bringing a Four Seasons hotel to his project, which sits in an area the Deer Valley resort is eyeing for a $50 million expansion that would bring five or six new ski lifts to Barnett’s front door.

The Extell chief is also rumored to be negotiating to buy another 1,000 acres nearby from a consortium of Dutch investors who have owned a large tract of some 4,000 to 5,000 acres since the 1980s, according to local sources.

“It’s one of the most desirable sites adjacent to the Deer Valley resort,” said Tyler Dustman, an appraiser with Cushman & Wakefield in Park City. “It’s a new portal into the resort, so that you don’t have to go through Park City proper.”

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