The Secret Sauce to Real Estate Development in Mountain Markets

Anyone who has built or developed a project in the mountain markets of Colorado is aware of the challenges that come along with it.

Others are learning, first-hand.

Land is scarce, the labor pool is shallow, the topography varies wildly, the building season is short, and don’t get us started on the amount of NIMBYism from folks that live here for a few years and decide no else should ever move here. This creates a difficult business environment for real estate developers, but for a few well positioned firms, these barriers-to-entry represent massive opportunity.

When our Founder and CEO, Mike Pearson, decided to make a serious move into the housing business in 2014, his goal was simple. He would primarily play the role of developer, and hire a third-party general contractor to build homes. Less than six homes into our first subdivision, we realized to do this at scale and outsize returns for our investors, our team would need to operate as the builder as well.

In response, we formed a construction group in 2014, and eventually an excavation and framing crew to drive both cost and schedule. In addition to self-performing, a significant portion of the construction process relies heavily on off-site construction, or alternative construction, for a large portion of the project. This can come in many forms, but it means that we primarily build the majority of our projects with modular construction. Our crew works with factories across the Western United States to build prefabricated buildings that are shipped and constructed on-site.

“The advantages of prefabricated construction are manifold in the markets that we focus on.” – Mike Pearson

The finished product is often cheaper to build, requires substantially less local labor, and provides a longer building season for our crew.

Of course, we are not the only developers that see the clear advantage of alternative construction methods, such modular construction. Over the past several years, several developers in the mountains have converted to this construction method, or at minimum, are avidly exploring it. What many are discovering, however, is while there are some distinct advantages to modular construction, it is by no means a “magic wand” to build in the mountains. When you construct the bulk of your finished product off-site, you must really know what you are doing. You must spend more time and resources on pre-construction. But, diligence in pre-construction is no guarantee, either. There are a multitude of other challenges to properly assembling, finishing, marketing and selling the end product. In fact, these challenges have opened the door further for our team.

Many developers currently hurdling development challenges associated with building places people love to live, work and play in mountain markets have contacted our team to consult and advise their team on a given project; handling the actual set, stack, and stitch of the real estate in development. When you combine our in-depth knowledge of the mountain market with a hands-on execution style at every project stage, it’s no wonder why Fortius Capital has humbly become one of the largest homebuilders on the Western Slope of Colorado. Our Founder and CEO often tells associates that, “while running a construction group in parallel to a comprehensive real estate investment platform is complex, it’s ultimately the foundation of our secret sauce and consistent successes in the mountain markets.”

If you are interested in learning more about investing in a Fortius Capital project, or if you have a piece of development land you would like us to consider, please contact our team, or sign-up for early data room access if interested in Fortius Fund I.

Our team in action.