Montage Big Sky Hotel opened in 2021 and is owned by the Montana division of CrossHarbor Capital Partners.
Provided by Lone Mountain Land Company
Tucked away in one of the many doors leading into the main lodge of Big Sky’s exclusive Yellowstone Club, Montana is equipped with comfy chairs, plenty of snacks, cold drinks, and a 15-by-15-foot model of the club. There is a spacious lounge. The photo shows the club’s private ski mountain, lush golf course, and hundreds of numbered properties scattered across its 15,000 acres, all of which help sell memberships.
Sam Byrne, a managing partner at Boston real estate investment firm Crossharbour Capital and the club’s principal owner, said his team has operated the club’s empty ski slopes since he bought it out of bankruptcy in 2009. It proudly lists the amenities it has added to its popular golf options. A performance arts barn that hosts intimate concerts by international rock stars like Sting and the Doobie Brothers. Fine dining restaurants like BaBa, run by Boston celebrity chef Ming Tsai. Nightclub. A stylish spa etc. “Nobody’s doing what we’re doing,” Byrne boasts.
No other large ski resort city in the country has a more powerful investor than Big Sky. In addition to acquiring the Yellowstone Club with Partners for $115 million 15 years ago, Crossharbour made two acquisitions in 2013 with the goal of developing more luxury homes in the area. The company spent $26 million to acquire Spanish Peaks Mountain Club, a 5,700-acre ski and golf community that also declared bankruptcy. He then invested $32 million in Moonlight Basin, a ski resort and housing development that also went bankrupt and was owned by creditor Lehman Brothers Holdings. After the deal was finalized, Crossharbour sold both Spanish Peaks and Moonlight Basin ski areas to Boyne Resorts, which owns and operates Big Sky Ski Mountain. We combined them into Big Sky Resort, making it one of the largest ski resorts in the country with approximately 5,800 skiable acres.
Crossharbour has invested at least $4 billion in debt and equity in Big Sky over the past 15 years. This includes acquiring 43,000 acres of land through the purchase of Yellowstone Club, Spanish Peaks, Moonlight Basin and Big Sky town center land, which will include homes, restaurants, two hotels, and more. This includes building new facilities and purchasing and constructing employee housing.
Matt Kidd, a Crossharbor partner who runs the company’s Montana subsidiary, Lone Mountain Land Company, said Crossharbour will purchase 500 acres from Bozeman’s Simpkins family in 2022, and plans to expand the Big Sky property. It is said that it owns more than half of the town center. That makes Big Sky the company’s largest overall project for the 31-year-old company, which also invests in apartment complexes, office towers and retail centers nationwide. “Cross Harbor is the most significant private land in the (southwest Montana) region, accounting for 75% of the local tax base,” the company said in its 2023 ESG report.
Matt Kidd (left) and Sam Byrne of Crossharbour Capital introduce the Doobie Brothers during their 2024 Labor Day weekend concert at the Yellowstone Club.
Provided by Yellowstone Club
All of this money is funneled into a town of about 3,300 full-time residents that is unincorporated and therefore has no mayor or city council. Most of Big Sky is located in Gallatin County, Montana, with the exception of the Yellowstone Club, which is part of neighboring Madison County. In addition to Big Sky Ski Resort, the Lone Mountain Land Company is the most at risk in town. It has led Kidd, who lives full-time in Big Sky with his wife and three children, to become something of the town’s unofficial mayor. .
“Their timing couldn’t have been better. They’ve been riding the wave for 15 years,” he said of Yellowstone, before founding and chairing Big Sky media, events and real estate firm Outlaw Partners in 2008. -Eric Rudd, who spent 10 years on the club’s sales and membership team. “We’ve seen about 30 years of growth in less than 10 years.”
Byrne, 59, first got into real estate as a teenager, earning her license at 17 and helping sell homes at her mother’s real estate office near Marblehead, Massachusetts. He co-founded Crossharbour Capital in Boston in 1993 to focus on commercial real estate private equity. It currently manages $10.2 billion in assets and has added offices in Chicago and Newport Beach, California. In 2020, Crossharbour sold a minority stake in the company to Dial Capital Partners (now owned by Blue Owl), Japan’s Sumitomo Mitsui Trust Bank, and Chinese private equity firm Hillhouse Capital. The company’s investors include about 300 families and family offices, including members of the Yellowstone Club.
CrossHarbor is a bit unstable when it comes to returns. Yellowstone Club’s early backers earned about 4.5 times their invested capital. “The Yellowstone Club has certainly been financially successful,” Kidd said. Mr. Kidd joined Crossharbour in 2008 to specifically work on Yellowstone clubs and has been running the company’s Montana operations ever since. As for other Montana investments, he says, “I think they should do well and investors will be rewarded for their patience and dedication.” Crossharbour also has investments in apartment developments in Denver, Virginia, Falls Church and other areas. A 1 million square foot distribution center in Phoenix is leased to Amazon. It can also be found in outdoor retail complexes such as Santa Rosa, California and Cranston, Rhode Island.
The Yellowstone Club was founded by Tim Blixseth, an Oregon timber entrepreneur and former billionaire. He purchased 140,000 acres of land near Yellowstone National Park in 1991, which he traded for land and founded the Yellowstone Club in 1999. Byrne, an avid skier, first visited a friend’s house. Having called the club home in the early 2000s, he fell in love with the place and became a member in 2005.
Two years later, Crossharbour had invested just under $55 million to purchase a portion of the club and was in the process of purchasing the entire Yellowstone Club for an additional $455 million. That deal eventually fell through. Blixseth, who borrowed $375 million from Credit Suisse for the club, used more than $200 million of that money for himself, buying yachts and luxury homes for his luxury timeshare business. It was later revealed that the attempt was unsuccessful.
The Blixes later divorced. In June 2008, Blixseth’s ex-wife Edra received the Yellowstone Club as part of the couple’s divorce settlement, and Crossharbour loaned Edra $35 million as a bridge loan to keep the club afloat. But that wasn’t enough. The club defaulted on a Credit Suisse loan and declared bankruptcy in November 2008. Crossharbour was by then fairly savvy about club finances, and partnered with about 40 club members to buy the Yellowstone club out of bankruptcy in 2009 for a whopping $115 million. Learn more about benefits and becoming a Yellowstone Club Millionaire member. )
After Cross Harbor expanded its Big Sky footprint, Byrne took a closer look at other resort towns, including Jackson Hole, Wyoming, which saw growth with the addition of two luxury brand hotels, the Four Seasons and luxury brand hotel chain Amangani. I observed that it accelerated. As of 2013, Big Sky had several hotels, but no national brand hotels. “The engineers and architects who work here still drive an hour back to Bozeman to earn Marriott points,” Byrne points out. Lone Mountain Land Company began developing Big Sky’s first four-star hotel, The Wilson, a Marriott Residence Inn-managed property in the center of town that opened in 2019. After nearly 10 years of construction and investment, it was completed at the end of 2021. More than $700 million, Lone Mountain Land debuts the luxurious Montage Big Sky Hotel. This hotel is an elegant development located within the Spanish Peaks Mountain Club with ski access to Big Sky Resort. It caters to high-end fits and luxury travel groups and helps fill rooms during off-peak times. “Hotels here operate at 100% occupancy from June 15th until mid-September. However, during the off-season, the group ultimately needs to backfill in order to successfully operate a five-star property. Because it costs a lot of money to run a facility,” Byrne explains.
Byrne still lives in the Boston area and travels to Big Sky several times a year. When Forbes visited in July, he was in town to celebrate the 15th anniversary of Crossharbour’s acquisition of the Yellowstone Club. An investor dinner that night celebrated their success.
After riding a wave of intense growth during the coronavirus pandemic, Montana’s relatively loose regulations and easy access to the outdoors drew new residents to this corner of the state, but Big Sky is slowing down. I have experienced it. Offers are still coming in for homes and condos, but Lone Mountain Land is adding attractions such as furniture credits when purchasing real estate. “In fact, now is a very good time to buy real estate in Big Sky. ,” says Kidd. One thing Lone Mountain hasn’t done is cut prices.
Cross Harbor Capital’s Montana subsidiary, Lone Mountain Land Company, currently owns more than half of Big Sky’s town center (pictured) and is developing a portion of it.
Provided by Lone Mountain Land Company
Very expensive and very exclusive Yellowstone Club (membership cap at 914 people, $500,000 deposit, minimum $10 million purchase of land or home to join, plus $78,000 annual membership fee and real estate ownership) Moonlight Basin and Spanish Peaks locations are relatively affordable. Home prices in Moonlight Basin and Spanish Peaks start at $1.5 million for a studio, but quickly rose to $30 million for a six-bedroom, 9,300-square-foot home. Membership fees for each club are $150,000 and $200,000, respectively, with an annual membership fee of approximately $25,000 that includes access to the clubhouse and club restaurant, as well as unlimited golf and other outdoor activities. (We also have low-cost memberships that exclude golf.)
Why has Crossharbour been able to survive and even thrive where several other companies have fallen into bankruptcy? Kidd says the Yellowstone Club, Spanish Peaks, Moonlight Club Basin’s previous owner was reportedly burdened with too much debt. “They were all different, but they all had too much impact. We need to build with equity so that they can withstand time and a difficult economic environment. You shouldn’t,” he explains. Lone Mountain Land does borrow money, but it’s for construction loans, not land purchases, Kidd said. Being able to purchase the Big Sky parcel at a bargain price certainly helped avoid the need for debt.
Like any resort city, there are many challenges, but the biggest one is the lack of housing for workers. Lone Mountain Land announced it has spent more than $200 million to build or acquire approximately 650 housing units for its employees in Big Sky and Gallatin Gateway, about 30 miles away. However, 75% of all Big Sky employees live in surrounding counties and commute to work.
No matter what, Byrne and Kidd have plans to keep growing. One of their newest efforts is the One&Only Moonlight Basin hotel, which has been in the works for nearly a decade and is located on a ridge within the Moonlight Basin community with stunning views of Big Sky’s iconic Lone Peak. Masu. One&Only is an ultra-luxury hotel chain founded by the late South African businessman Sol Kerzner and currently owned by Dubai Investment Corporation (the main investment arm of the Dubai government). Big Sky will be the company’s first U.S. location. Lone Mountain Land is spending $850 million on the project, with Dubai Investment Corporation as a minority partner. The hotel’s ski lodge (connected to Big Sky Resort by a new gondola) will open in December, and the hotel is expected to open next year.
Lone Mountain Land is expanding further into Montana. In 2021, the company purchased the 18,000-acre Crazy Mountain Ranch, about an hour and a half from Big Sky, and established a separate club there with fly fishing, horseback riding and a golf course under construction. Initial deposit to join: $1.5 million. Back in Big Sky, they believe they will build 200 to 400 more homes each in Spanish Peaks and Moonlight Basin over the next 15 years. Two more hotels are planned to be added, but details have not yet been disclosed.
“It was clear that restoring the Yellowstone Club would require community-based infrastructure investments to increase the value of everything,” Byrne said. “We thought it would be best if we could control how that product flows into the market and be involved in all of that. That’s why we think it’s best if we can control how that product flows into the market and be involved in all of that. That’s why we’re trying to balance the fundamental balance of what’s happening at Big Sky. ”
