November 30, 2008

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
November 30, 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’s 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.

You are receiving this information because, at some point, you asked or a friend referred your name to be included in our e-mail Insider’s List. If you no longer wish to receive this information, send an e-mail reply to me (tim@hoffleigh.com) and ask to be removed. Alternatively, if you know someone who could benefit from the receipt of this information, forward this e-mail to them, and suggest they contact us, so we can consider adding them to our exclusive list.

All Market Average Office Building Sale Price PSF = $109.71 (DOWN from $110.83, last week.)
There are currently 110 office buildings for sale.
This is 1,210,092 square feet, which represents a total market value of $132,759,895.


Tim’s Market Notes:

I am mostly recovered from my surgery, enough to be back at work full time.
To all of you who wished me a speedy recovery - Thank you.

If you wish to see this week's data, to minimize the space required by this letter, we have provided links at the bottom of this letter.

The snow has finally come to Colorado Springs and I’m not going to lie, I don’t like it. I grew up in North Dakota. As a snotty-nosed teenager, I was able to skate 4 blocks across frozen streets from my childhood home on Reeves Drive to the hockey rink at Central Park. In the process of learning to skate and play hockey, I froze my fingers and toes so often that I no longer enjoy cold seasons. When I was a kid, it was so cold that when we’d chink pucks off the metal goal posts, they’d shatter. When I was a kid, it was so cold the scruffy old rink attendant always had a ½ pint handy to warm his spirits - and to share with curious adolescents who were more than willing. I mean, really, not that I would ever. But I had friends. And while I’m not positive, I think he may have taken up residence in Monument Valley Park behind the Chinese Elm tree along the south fence. When I was a kid, the snow was so deep. . . A friend of mine knows its time to migrate south when he can no longer play golf in sandals. I think he may be onto something!

There continues to be interesting reading in the business pages this week. The El Paso County pension fund says, for example, that they need $4.7M per year in additional funding to remain solvent. I remember when I was jealous of city and county employees. I thought, “They have it made. They have steady jobs with guaranteed retirement and an easy life with no stress or worries”. NOT. Then there’s the state run PERA who now has $52.5 Billion in liabilities against $29 Billion in assets. How does that math work? PERA has always projected and depended on an 8.5% annual rate of return on assets to grow and be sufficient to pay its obligations. I know lots of folks who would almost kill for that rate of return, (or any return), at this point. Earlier this year, my wife, a Memorial Hospital employee for over 20 years was planning to cash-in her retirement plan early. Now, she wonders what her pension will look like. I told her not to worry; she married a good retirement plan!

Then there is Tucker Hart Adams who may have the only good news for those of us who continue to believe that real estate is still a good asset class and a very good, long-term investment. She is forecasting “strong inflationary pressures over the next few years as the increase in money supply pushes up prices.” She goes on to say, “I’m concerned they’re (that would be the government, Bob!) creating huge problems down the line. . The potential for inflation is enormous.” When you think about it, it all makes sense. What alternative does the government really have? Inflation will make us think we’re rich and it will allow the government to pay-off the national debt at a discount. By the way, that national debt is now estimated to be in the range of $10.6 Trillion. What the heck kind of number is that? People who know about these things say that if the economy inflates the value of real estate increases. If that’s true, call me quick! Load up now before it’s too late! The value of your small commercial building should increase. There is a trick. It’s called dry powder. Some people would know this as cash flow. The obvious trick is to make it long-enough.

Is your tooth aching yet? There’s more. Of the 455,000 homes purchased in the Denver Metro-plex over the past 5 years, the smart people say “over 145,000 of them are worth less than their debt”. You should re-read that. That’s 32% of the houses sold in the past 5 years are over-loaned. It’s called “being under water.” Add this term to your vocabulary. Heck, I always thought being under-water was what happened when I swam-up to the bar in Cancun for “Cervasa, por favor”.

Now Charles Krauthammer says we have moved from a market economy to a political economy. He says “Today’s extreme stock market is not just a symptom of fear – fear can’t account for days of wild market swings upward”. He says to consider “On Tuesday, Paulson broadly implies he’s only using ½ the $700 Billion bailout money. Having already spent most of his $350 Billion, he’s going to leave the rest to his successor. The message received on Wall Street was – “I’m done. I’m gone”. Facing the prospect of 2 month’s of political limbo, the market craters. Led by the banks, whose balance sheets did not change between Tuesday and Wednesday, the market sees the largest 2 day drop in the S&P since 1933. The next day, word leaks of Timothy Geithner’s impending nomination as Treasury Secretary. The mere suggestion of continuity sends the DOW up 500 points”. More political announcements drive the DOW up again and again over the next couple of days. Then I wonder if I missed the bus. I think of these times, that in the future, we’ll wonder where we were the day the market dropped 900 point, or rose 500 points, much like we wonder where we were the day Kennedy was shot. There have been no real economic reason for the wild swings, but political. Thus argues Krauthammer, we are in a political economy. He says we no longer look to New York for financing, but to Washington for bailouts. When do we Realtors receive our bailout?

I asked a friend of mine, who manages a mutual fund for his own account, about investing in the market. He said it’s not investing right now. It’s gambling. Damn. Since I’m not a gambler, then I can’t place a bet on General Electric or Osh Gosh, which is not a pants company. Not that I’m too competitive or anything. I merely I want to buy low and sell high and make a zillion dollars without risk or worry. I thought that was part of the new American culture. You can’t lose. You can only win.

They didn’t teach us that at the rink. Winners worked harder and got better outcomes. They shot more often. The scored more goals. They celebrated victory. Losers? Back in the old days, it sucked to be them.

Want to know more? Contact me at Tim@HoffLeigh.com

If you wish to see this week's data,
to minimize the space required by this letter,
I have asked my PA's to provide links at the bottom of this letter.

Focus on Charitable Event

What: Red Kettle Breakfast
When: December 2nd, 7:00 AM
Where: Antler’s Hilton
Why: Fundraising Kick-Off for The Salvation Army
How: Show up and pay up@

Want to know more? Contact me at Tim@HoffLeigh.com

I hope you had a profitable week and next week is better!

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