July 11, 2008

Tim Leigh’s Friday Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
July 11, 2008

Attached is our complete listing of all properties for sale in Colorado Springs, based on property type - office, industrial and condo. This is the most complete listing that we are aware of. It is our goal to provide this information, updated weekly. We develop these lists by basic research and cross-checking data points from the PPCIE, local broker's individual web sites, The Turner Book and any other public information domain we can find.

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All Market Average Office Building Sale Price PSF = $112.56
There are currently 125 office buildings for sale.
This is 1,182,635 square feet, which represents a total market value of $133,113,083 (This is an increase of 23,046 sf and $3,007,490 in market value.)
If sold for a 7% average real estate commission, these sales would generate $9,317,915.81 commissions.


All Market Average Warehouse Building Sale Price PSF = $67.96
There are currently 87 industrial buildings for sale.(This is an increase of 2 builidings from last week.)
This is 1,554,327 square feet, which represents a total market value of $112,036,275. (This is an increase of 94,252 sf and $4,285,000 in market value.)
If sold for a 7% average real estate commission, these sales would generate $7,842,539.25 in commissions.


All Market Average Office Condo Sale Price PSF = $167.56
There are currently 90 office condos for sale. (This is a decrease of 4 from last week.)
This is 193,880 square feet, which represents a total market value of $32,487,378.
If sold for a 7% average real estate commission, these sales would generate $2,274,116.46 in commissions.


All Market Average Industrial Condo Sale Price PSF = $83.01
There are currently 31 industrial condos for sale.
This is 106,962 square feet, which represents a total market value of $8,878,523.
If sold for a 7% average real estate commission, these sales would generate $621,496 in commissions.

Our commercial real estate sale and leasing activity has been brisk. Over the past week, we closed the sale of 6 office condos, several leases and placed under-contract a large industrial building. While we continue to see falling prices, we are beginning to see activity pick-up. As you know, we have 100’s of properties listed at our web site, www.hoffleigh.com. I invite you to visit them. We have several new offerings. We have an office condo project where the Seller told us, “Get them sold!” and is now offering Seller financing at 4.99% interest, 30 year amortization and 7 year balloons. I spoke with several people last week about buying. The sentiment with many people is to simplify and not complicate their lives by purchasing.

Good news this week. According to Steve Helbing, the Regional President for Wells Fargo Bank, the turn-around is coming in the spring. Unfortunately, Steve is unsure if it is this spring or the spring of 2010.

The bad news for small business continues to mount. Bernie Antoine, the owner of Rocky Mountain Industrial Supplies, who has been in business for over 20 years, has seen a 60% drop in sales over the past few months. Bernie told me that his account with the city used to generate a monthly PO of $15,000. Over the past few months, it’s dropped off-the-charts to $5,000 per month. He’s the quintessential small business guy who has been terribly affected by the upturn in gas prices and the general anxiety & uncertainty in the economy. Bernie has two F150 Vans for sale. He can’t afford to fill the tanks. He’s now making deliveries from his used Ford Focus.

Doug Gesick, the owner of Gesick Motors, and who has also been in business for over 20 years, told me that his business had been OK, until about 3 months ago. Then, “Somebody turned the faucet off!” He told me that “At the auto auction most of the large SUV’s are selling for over $10,000 back-of-book. And, the trouble is, when someone wants to trade their large gas guzzler for an economy car, they normally have more debt than value”. The other problem is that dealers recognize the diminished value of the SUV’s and no longer want those trades because their resale market is so thin. This sounds like trouble brewing, and I would make an educated guess that the next problem we’ll need to address is a wave of auto loan foreclosures.

On a positive note, I had recently had the good fortune to work with Don Allen and his staff at American Energy Resources Corporation. Don’s group drills for oil, mostly for his own account and for the accounts of his passive investor groups. This is a very high risk-high return game. I’m not endorsing the investment. But it’s fun to see the oil pumping right out of the ground. If you want to have a look at the gusher he found last week on the high plains of Western Kansas, go to their web site, www.amerenergy.com. Don told me that that particular well would pump 200 barrels per day for several years! Talk about passive income! Don controls 45 square miles of land where no Prebel’s Meadow Jumping Mouse dare tread and nary a tree-hugger dare trod.

From the police blotter, I was surprised to find that one of our homeless guys has used one of our commercial building addresses for his permanent address. I was also told that Monument Valley Park is no longer considered safe for single women because the PD is aware of at least 2 sex offenders who live in camps in the park.

From the continuing residential saga, I took a cry for help from a nice, young lady last week. She’s a 29 year old RN married to an airman. They bought a house close to the Kansas/Colorado border (Marksheffle & Highway 24). They paid about $130 per square foot. It’s now worth $100 per square foot. That puts them $50,000 upside down. They know they are going to lose the property because he is being transferred. There’s another write-down for a lender. They thought about leasing-out the house. Trouble is, there are over 80 rentals in their zip code. Ugh!

On the political front, I have decided to vote for Jeff Crank. I have been ambivalent about whom to support for the 5th Congressional District, but have become persuaded that Jeff is the right guy for the job. At some point, integrity does matter. To get him elected, Gary Bohall told me that we need 25,000 people to show up and cast ballots at the primary. The mail-in ballots have been sent-out. Pull the plug for the right guy.

Thank you for your continuing support. As always, feel free to call me directly or send me an e-mail.

My private cell line is 719-337-9551. My e-mail is Tim@HoffLeigh.com.


Sincerely,

TJL
Tim Leigh
719-337-9551
Tim@HoffLeigh.com


To view our Office Matrix List please click below
http://hoffleigh.com/OfficeInsider.aspx

To view our Industrial Matrix List please click below
http://hoffleigh.com/IndustrialInsider.aspx

To view our Office Condo Matrix please click below
http://hoffleigh.com/HLIOfficeCondos.aspx