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The Flip

433 Mountain Rd, Stowe, VT (aka The Ye Olde English Inn):

The Ye Old English Inn was scheduled for a foreclosure auction on May 22nd 2014.  Because of our knowledge regarding the Stowe commercial real estate market, our assessment of the property and the constraints an auction creates for a pool of buyers we expected the property would sell for around $800,000.  Because there was a potential to get a great price relative to the value I informed an investor, Pat Malone of Malone Properties, he should plan to attend the auction and plan to bid up to $800,000.  He scoffed, saying it wasn’t possible.

On the auction day the assessment of the situation proved correct – four groups registered to bid and only three actually bid.  With my guidance, Malone Properties, was able to secure the Ye Olde English Inn, pay off all the liens and own the property at a cost 42.6% below assessed value.  It prompted Pat Malone to comment, “We stole that building!”

Please click here to read the article the Stowe Reporter did on the auction sale.

Ultimately, the unrealized value in the acquisition proved correct.  In just two days, the property was under contract with a new buyer, Lark Hotels (click this link for Lark Hotels website), to flip the property for a substantial windfall.  The proposed transaction made Malone Properties about $250,000 in less than six months – just flipping the property and not doing any improvements.  This means Malone Properties realize a 40% plus annualized return on their investment following my advice and counsel.  Not to mention they are still an investor in the project. They are receiving an investment return with no money in the deal.  Anyway you look at it, this was the proverbial home run.

Lark Hotels and Malone Properties have decided to open a hotel named Field Guide, click here to stay up to date.  According to an article from the Stowe Reporter, Lark Hotels and Richard Blood plan to invest about $2.7mln into the hotel.  Please click here to read the recent article on the new hotel in the Stowe Reporter.  

This type of investment would seem to push the project beyond what would be a reasonable investment return.  Keep in mind, the building was acquired for an astonishing $35 per sq ft - effectively the land value.  The new hotel will have a farm to table restaurant in what is rapidly shaping up as the Restaurant Row of Stowe.  Given the investment basis and the critical mass of restaurants in the immediate vicinity, like the Bench, O'Grady's, Rim Rocks and Backyard it would seem the Field Guide is going to be a very profitable investment for all involved.

I was a pleasure to see that our advice and counsel created such a windfall for Malone Properties.  That kind of investment guidance is worth... well, this one is still giving.  It is also a pleasure to have helped in moving a new and vibrant hotel and restaurant into Stowe.

If you would like assistance finding a Stowe or Northern Vermont commercial or investment property, please contact me at nick@stowevt.com or 802.585.1131.  I would be a pleasure to help you realize your commercial real estate investment goals.


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