Case Study:
The Ridge at Table Rock Lake

This business case study involves a major development opportunity in the Branson, Missouri area in which Brookwood engaged DPZ CoDesign (DPZ), the world-renowned architecture, urban design, and planning firm, on behalf of its client MD&D Investments LLC (MD&D), a Colorado based real estate entity.  As part of its continuing services, Brookwood also engaged Hospitality & Leisure Advisors (HLA) and S&L Hospitality (S&L) to further validate the business plan and provide marketing support.

Background

MD&D acquired an 810-acre property that represented a compelling opportunity in the vicinity of Branson, Missouri – the popular southwest Missouri family-friendly vacation destination that attracts 9 million visitors to its diverse array of theaters, music venues, entertainment attractions, and outdoor recreation.  After several years of ownership and management of the property, MD&D engaged Brookwood: first, to perform a market study; next, to undertake a financial feasibility analysis; and subsequently, to create a new concept and master development plan. 

• Previously known as Indian Ridge and prior to MD&D’s acquisition, the property had a troubled history. The prior owner had been dogged by a litany of legal and political problems, eventually being foreclosed upon by the FDIC.

• The previously approved plan was not suited to today’s market, financial, and real estate environment. For example, there was no economic justification for additional golf courses in the region. Other elements, such as an ill-conceived museum, also needed to be removed from the plan. Moreover, the competitive setting had changed, with new developments setting higher standards for real estate projects in the Branson area.

• Because the property had many of the favorable characteristics needed for successful development, MD&D successfully managed many of governmental, financial, and physical issues tagged with a challenged history.  Years after the initial FDIC foreclosure and MD&D’s subsequent purchase, perceptions had finally begun to turn around.

• However, MD&D understood the need to re-imagine and re-envision the project. Therefore, a new approach and plan were needed for the investment opportunity and to determine the value of the property.

Engagement

• Brookwood was retained to conduct a comprehensive strategic property assessment and to perform a top-down project overview; and identify the framework upon which MD&D could evaluate the potential favorable characteristics going forward - thus leading to the monetization of the asset and maximizing the project’s long-term value for development.

• Working collaboratively with MD&D in the role of Master Developer, Brookwood assembled and led an expert team in the evaluation of the property’s potential and in devising the development concept for a broad mix of uses, particularly with respect to the proposed hospitality/entertainment sites.   

Market Study

• Brookwood’s research and project methodology for the strategic property assessment of the project focused on both a high-level and in-depth evaluation of the real estate opportunity. This created a framework upon which to achieve goals and objectives.  The market study included:

  • Review of zoning and land-use (current and prospective) along with development potential;

  • Assessment of the market dynamics (including demand and pricing) for prospective target product types;

  • Evaluation of market comparables – both nearby and throughout the target market/region;

  • Performing a detailed equilibrium and capture analysis – and assessing results with regards to competitive properties;

  • Evaluation and planning of alternative building concepts;

  • Understanding of the construction challenges;

  • Estimates for the costs for the proposed concepts; and

  • Recommendations for appropriate uses and size, pricing, and timeline for development – which in turn led to a plan for next steps in the sale and development of the property.

• The Brookwood team conducted numerous fact-finding and data mining expeditions. These comprehensive efforts included meeting with Government Officials; Economic Development and Tourism Agencies; Quasi-government & Non-government Officials; and, Real Estate & Private Sector Businesses.

Financial Feasibility Analysis

• The financial feasibility analyses were run on the various land uses to test the viability of development and the potential for sale opportunities with the proposed concept plan.  These analyses confirmed that land developers, parcel developers, and project builders could earn a return commensurate with the anticipated risk of developing in this location.

• The feasibility analysis inputs were based upon market information that was gathered in the strategic assessment and tested against generally accepted real estate return guidelines for each property type.  Furthermore, Brookwood provided cost estimates to guide in the evaluation of the analyses.

• In addition, the results were measured against the market data and comparables.  The analysis showed that the sale and development of parcels were viable for new hospitality venues; commercial and entertainment venues; multi-family rental product; single-family lot sales; and single-family or attached homes.

• A sensitivity analysis was also run utilizing a range of discount rates to represent differing risk thresholds held by developers and investors for managing the risks and rewards at this location. This effort facilitated the ability to craft and assemble a detailed and formal pricing strategy and plan of action for prospective sale, joint venture, and development. 

Concept Plan

• The market study confirmed that property presented a rare opportunity to create a true destination that could be branded with its own unique identity and renamed as “The Ridge at Table Rock Lake”. As a result, the new concept and master plan created with DPZ included:

  • Attractions / Entertainment / Commercial Uses

  • Hotel / Hospitality / Resort Uses

  • Medical & Campus Related Uses

  • Residential Uses

• The analysis also resulted in recommendations for a premier entertainment destination with a 350-room indoor water park & resort hotel as well as a separate 100-room limited / select service hotel.  Based upon additional research and in-depth feasibility study by H&LA for the resort and utilizing the operational expertise and input of S&L, these two uses would complement the substantial residential, commercial, entertainment, and hospitality opportunities identified in the study.

• Moreover, clustering hotels and attractions in a would add value to the sale and development of the parcels within. This model has been done very successfully in both Las Vegas and Orlando – and could be replicated in this location on a smaller scale. Branding and creating this cluster would also accelerate land sales and development of the property.

• The market study also identified that the primary highway gateway was an opportunity to create a major extension of the Branson entertainment “Strip” beyond Silver Dollar City (the adjacent and largest attraction in the region). The hotel, hospitality, and entertainment cluster could serve to support the west side of the Branson region and Silver Dollar City, which is lacking in direct lodging facilities and complementary supporting commercial attractions.

Results and Next Steps

• The associated conceptual, market, financial, and feasibility assessments provided the platform for creating the strategy and next steps for parcel sales, joint venture, and direct development.  In addition, the strategic review provided guidance on how much development could be built and address the following opportunities:

  • What changes (if any) to zoning would be appropriate to increase density, given various options;

  • Designation of potential sales and development parcels and of market potential for each;

  • Recommendations for additional efforts with regards to further in-depth market and/or financial study to determine specific development, pricing, sale, or joint venture strategies for individual parcels:

• Of special note, the water park / resort was envisioned to bring fresh energy and excitement to an area that has already been anchored as a destination by the established and growing popularity of adjacent Silver Dollar City, which alone attracts over two million visitors each year.  Innovative recreational concepts focused on family entertainment and attractions are also targeted for additional locations within the property. As a result, a leading developer/owner/operator of indoor waterparks and hotels was engaged to partner in the next phase development.