A Red Mountain mansion eyed for redevelopment by RH recently changed ownership for $26 million in a transaction the company’s top executive cited in an earnings call before saying “oh, shit” as President Donald Trump was announcing his tariff actions on Wednesday.
Among other media outlets, The Associated Press reported the “real-time reaction to the impact of President Donald Trump’s tariff actions and lackluster earnings has the CEO of luxury furniture maker RH in the spotlight.”
As he saw stock in Corte Madera, California-based RH, formerly known as Restoration Hardware, plummet by 40%, CEO Gary Friedman said “it’s no secret” the public company and others in its industry source products from Asia. The information is spelled out in its annual report, he said.
The timing of the earnings call came as Trump, on what he hailed as “Liberation Day,” announced a range of taxes being slapped on imports with trading partners as part of a long-range economic plan. The effects were immediate, striking everything from individual retirement accounts to automobile manufacturing to the price of vanilla and coffee.
RH is teaming with developer Mark Hunt, who owns more than $100 million in commercial property in downtown Aspen, on the creation of an Aspen Ecosystem, so called because of its offerings of a luxury boutique hotel, a show gallery including retail and dining, and residential properties. The announcement was made in January 2021.
Once the ecosystem is complete, users of the residential components of the ecosystem also would have membership to the hotel — the RH Bath House & Spa under construction at the old Crystal Palace Dinner Theatre site on the 300 block of East Hyman Avenue.
One of the residential components — the “RH Residence on Red Mountain” — was intended to be “a fully furnished six bedroom home with multiple terraces and an infinity pool with views of downtown, Aspen Mountain and Independence Pass,” according to the announcement.
County records show a limited liability company under Hunt’s control acquired the property, which has an address of 319 Ridge Road, for $11 million in August 2020, before the Aspen Ecosystem partnership was announced.
“We’ve got real estate assets we can turn into cash,” Friedman said during the earnings call, noting that “we just turned one of the buildings into cash. We had a building we had in Aspen that was purchased for $10.5 million or something like that, $10.5 million, we just sold for $27 million. So yeah — and so, we were going to build a house on it and the housing — the construction costs in Aspen became prohibited, but it didn't look like a good investment. If someone buys this old house, we’re almost three times what we paid for it. So our JV partner and our side decided to monetize that.”
“JV” was in reference to RH’s joint venture partner in the Aspen projects, Hunt. (For clarification, Friedman mistook the $11 purchase and $26 million sales prices in his comment.) Hunt did not respond to a message seeking comment Friday.
The home, built in 1982 and remodeled in 1985, “has been impeccably maintained and boasts seven bedrooms on three levels,” according to online marketing material for the property, which was on the market for 639 days. “A media room, elevator, three car garage and attached caretaker apartment are just a few of the highlights in this home.”
Based on a regulatory filing made last week, RH received $15 million from the LLC for the sale, which accounted for $2.9 million the LLC owed RH. The remaining amount was in capital distributions.
Eight subsidiary LLCs under RH’s control were created in 2022 “for real estate development activities related to our Gallery transformation and global expansion strategies” in Aspen, the filing said. RH has full control of one of those LLCs and 50% to 75% in the others, according to the filing.
RH and Hunt are redeveloping the former Bidwell Building, located at the corner of Galena Street and Cooper Avenue pedestrian mall, into a three-level RH Bespoke Gallery with a restaurant, retail and skylights.
Another prominent aspect of the Aspen ecosystem — RH Bath House & Spa, and a restaurant and cafe — remains an active construction site.
The old Boomerang Lodge property at 500 W. Hopkins Ave. is being upkept; however, no redevelopment has started on what was initially tabbed as a residential project under the RH banner.
The overall housing market is its worst in roughly a half century, Friedman said.
“While we expect a higher risk business environment this year, due to the uncertainty caused by tariffs, market volatility, and inflation risk, we believe it’s important to separate the signal from the noise,” he said.
“The fact is, we’ve been operating in the worst housing market in almost 50 years. For context, in 1978, there were 4.09 million existing homes sold, when the U.S. had a population of 223 million. Contrast that to 2024, where 4.06 million existing homes sold with a population of 341 million, and it illuminates just how depressed the housing market has been this past year. Despite that fact, we are performing at a level most would expect in a robust housing market.”