June 27, 2008

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
June 27, 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 = $112.20
There are currently 120 office buildings for sale.
This is 1,159,589 square feet, which represents a total market value of $130,105,593
If sold for a 7% average real estate commission, these sales would generate $9,107,391.51commissions.


All Market Average Warehouse Building Sale Price PSF = $69.32
There are currently 85 industrial buildings for sale.
This is 1,554,327 square feet, which represents a total market value of $107,751,275.
If sold for a 7% average real estate commission, these sales would generate $7,542,589 in commissions.


All Market Average Office Condo Sale Price PSF = $164.75
There are currently 94 office condos for sale.
This is 198,757 square feet, which represents a total market value of $32,746,190.
If sold for a 7% average real estate commission, these sales would generate $2,292,233 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.

I’ve been living the Colorado Dream this summer. I continue to pinch myself when I look at Pikes Peak and Garden of the Gods on my morning drive and as I re-discover the amenities of Colorado living. Here’s a good work-week’s substitute sampler of the Colorado life-style – day 1) white water rafting through the Royal Gorge; day 2) golfing the Colorado Rocky Mountains; day 3) climbing one of the state’s 52 fourteener’s; day 4) boating in the Pueblo Reservoir; day 5) mountain biking or hiking the Manitou Incline or any number of local trails. Saturday & Sunday – take those days off by watching professional sports or visiting a cultural venue. Or, you could be in California - fighting traffic, wild-fire burn haze and participating in their rapidly deteriorating economy and their, continuously dropping, real estate markets. I’ll take what’s behind door number one, Bob. I've been telling my wife for 30 years, "People drive for thousands of miles to come here!"

On Thursday, the Dow Jones industrial average gave up nearly 360 points and fell to its lowest level since September 2006 on a combination of worries about oil prices and the financial, automotive and technology sectors. General Motors Corp. shares dropped to their lowest level in more than three decades. Some are saying that we can expect $150 - $170 per barrel oil by mid-summer. Ugh. With crude oil on a seemingly unstoppable incline, Wall Street remains concerned that it will slam consumers with not only elevated prices for energy, but also for other goods if cash-strapped companies decide to pass along the rising costs. Many of the small businesses I talk to are preparing to add gas trip-charges to their fees. Early this morning, light, sweet crude rose more than $1, and is now priced past $141 a barrel in pre-market electronic trading.

My friend, Andy Neinas, the owner of the Echo Canyon River Rafting Company (www.raftecho.com) told me that gas prices have adversely affected his business. His sales are down about 7%. He is grateful that that is the extent of his loss. He also blames adverse publicity from the local media about the danger of white water rafting because of high water flows. It has been 13 years since the Arkansas River has seen the kind of flow it's currently enjoying. Because of the tremendous snow pack, (likely due to global warming), the water on the Arkansas River is running very high and fast and makes for a great adventure. Last week, on my trip with my kids, it was running at 4,250 cfs (cubic feet per second). Here's some context - that is the equivalent of 4,250 basketballs running downstream every second! Over the past 25 years of measuring, by this time in the summer, there would normally be 2,400 basketballs being hurled downstream - per second! (For the scientific minded, the velocity of the water X the volume of the water = the impact the water will have on throwing you out of the raft. Andy can be reached at andy@raftecho.com or 800-748-2953. Our guide, Cameron had not flipped a raft during his six years on the river, until we showed up. That class 4 run was too much fun – washing through in our life-jackets!

2 building owners called me last week. These were guys who heard about specific tenant needs we had. These calls were made, unsolicited and in spite of them having their own broker. That is bad sign of the times. While they were not totally disparaging of their broker, there was an implied message. Everybody hates car salesmen, lawyers, brokers and the IRS, except everybody loves "their guy". In this context, it seemed more unusual for a building owner to call directly. This is an unsettling occurrence. It speaks of desperation in the market place. One of the owners told me he had been through 3 brokers over the past 2 years and has had NO showings. The other was working on his own property and invited us to bring tenants directly to him. He said, "I can get the deal done more quickly without my broker in the middle!"

I took a call from an old friend last week. This is a guy with a lot of credibility. I have known him for 25 years. He approached me about buying investment property in Colorado Springs, with Iranian dollars. He told me that many of his friends in Tehran were very interested in cashing-out of that market. He said commercial real estate in Tehran is now more expensive than commercial real estate Tokyo. He told me that real estate values in Tehran have tripled - in the last year! He went on to tell me that in war-torn Iraq and the potentially war-torn Iran, (if it comes to that), the economy will continue-on as if there is no war. He said, “People on the ground, the normal people who run small business like you and me, create and work in an economy despite gas prices, too much sunshine and lost tourist”. There may be a lesson in there for us.

My sister-in-law's friend's physic told her that August was going to be the end of the world. Our real estate market is down, but it is not the end of the world. Not just yet. This in spite of bureaucratic meddling that prevents a refrigeration company that I know from opening its wholesale sale business in an M-1 zone, which makes no sense. The end is not coming in August. There is an economy in spite of what some say. We are leasing and selling buildings.

As always I appreciate your feedback. You can reach me at Tim@HoffLeigh.com.

Have a great week!


Sincerely,


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


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

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

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