September 20, 2008

Tim Leigh’s Friday Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
September 20, 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 = $111.77 (DOWN from $112.72, last week.)
There are currently 135 office buildings for sale.
This is 1,433,368 square feet, which represents a total market value of $160,211,755.

All Market Average Industrial Building Sale Price PSF = $74.47 (UP from $70.48 last week.)
There are currently 91 industrial buildings for sale.
This is 1,332,382 square feet, which represents a total market value of $99,223,025.

All Market Average NEW-CONSTRUCTION Office Condo Sale Price PSF = $180.18
There are currently 50 newly-constructed office condos for sale. (There are no changes since last week.) This is 92,066 square feet, which represents a total market value of $16,588,858.
Interior build-out costs from shell-space range between $50 to $100 psf.

All Market Average 2nd Generation Office Condo Sale Price PSF = $143.36
There are currently 89 2nd generation office condos for sale. (There are no changes since last week.) This is 96,289 square feet, which represents a total market value of $13,804,030.
2nd generation office condos are defined as “office condos which have been previously occupied and therefore, are already built-out”. It is my opinion that now is an opportune time to purchase 2nd generation office condos because they can be purchased at very deep discounts from their newly constructed counter-parts and from their replacement costs.

Closed Sales

Currently, we have 39 buildings, sorted by office, retail or warehouse. Our list grows with input from our friends at Unified Title Insurance Company and information from our network of friends, like you. If you are aware of any closed transactions, let us know. We’ll add that data to our list for everyone’s benefit.

In the office category, our lowest price sold comp is $41.31 psf. Our highest priced comp is a small office building in Monument, which sold for $190.97 psf. I have spoken with several appraisers this week, and based on their feedback, I will go-out on a limb & predict a significant downturn in closed sale prices on older buildings and a less significant downturn on all other asset classes.


New Office Buildings listed this week:
1490 Garden of the Gods Road: 33,500 square feet, $4,200,000; $125.37 per square foot.
506 North Cascade Avenue: 7,045 square feet; $1,130,000; $160.40 per square foot.
514 North Cascade Avenue: 8,017 square feet; $1,050,000; $130.97 per square foot.

New Industrial Building listed this week:
700 Juanita Street: 2,227 square feet; $99,000; $44.445 per square foot.

Other interesting listings:

The Hearthstone Inn Properties: This is a 2 building (former B&B) complex that was purchased for re-sale as a B&B. That deal fell apart. Now the buildings are for sale separately or together. There are currently 3 buildings (in the 5,000 square foot range), in or near the downtown, for sale. These are 2 of them. The asking prices are $130 & $160 psf respectively. Either building would be well suited as individual user office space.

FedEx Warehouse: This 48,105 square foot industrial building is in Bowling Green, Kentucky. It generates $348,702 in annual NOI and is for sale for $4,712,000, which is a 7.40% cap rate. There is a new 10 year lease in place. Bowling Greene, for those who don’t know, has been rated by Forbes Magazine as one of the “Best Small Places to do Business” in the USA.

You can reach me at Tim@HoffLeigh.com or 719-337-9551.

OK, or maybe not:
700 Juanita Street is only interesting because of the pricing. This is a bank repo. It’s a small (2,227 sf on a 4,567 sf lot) industrial building with typical, low-ceiling functional obsolescence. The asking price is only $99,500. I would guess that it will ultimately sell for $50,000. This is the beginning of the repo, price-reduction parade that I’ve been predicting.

Are you kidding me?
The Creek-side Apartments house freshly released sex offenders & cons whose former address include a Canon City zip code. Of course they were all wrongly accused & incarcerated. – all innocent victims of blind justice! The marketing flyer claims this property is set in a tranquil, park-like setting. The pricing information for this property is $60,700 in gross rent against a $489,000 sale price.

Our investment advisory goal is to match the appropriate opportunity with the investor’s needs & goals. Want to know more? Contact me at Tim@HoffLeigh.com or contact RD@HoffLeigh.com. And, you can always see 100’s of listings on our web site, www.HoffLeigh.com.

Tim’s Market Notes: “The road to good intentions is paved with hell.”

I’m reporting from poolside at the Lafayette Park Hotel in beautiful Lafayette, CA today. Unlike the financial markets this past week, the weather here is mild and calm. What’s your world like today?

From Peggy Noonan writing in the Wall Street Journal this weekend, “It isn’t just bad news, it’s bad news that reveals what many people deep down feared and hoped not to see revealed; that the huge and sprawling financial system of Wall Street is maintained essentially on faith, mood and assumption; that its problems are deep; that at some level the system looks to have been a house of cards. It isn’t just bad news; it’s deep bad news that reached into the heart of widespread national anxiety. Everyone is afraid – the rich that they will no longer be rich, the poor that they’ll be hit first by the downturn in the last hired, first fired sense, the middle class that it will be harder now to maintain their middle-classness.” Ms. Noonan hits the nail on the head.

I have spoken to several people in the past few days, from the stewardess on the flight out, to the massage therapist, who is trying to put herself through school, to the RN from Chicago. They all express the same anxiety and fear about their future. None feels like they have a secure retirement plan. (The RN has decided on plan B - marrying somebody rich!) One of my PA’s parent lost ½ of his savings this week. What about the RN from Chicago? Her father lost nearly ½ his savings, too. This week! They have 401K’s and 403B’s, but they’ve all taken such beatings that they have no immediate hope or plan of ever collecting sufficiently for any retirement. They all plan to work to the grave. Is that the new reality? How is your retirement plan? Counting on Social Security? My advice – don’t.

My advice has always been “buy and own and pay-off real estate”. Obviously, not everybody can do that. But, if you were among the “everybody”, you would not be receiving this column. How do we weather these storms? And believe me, I’ve had to do some soul searching this week, and thinking about weather and storms. What’s the best advice? Stand fast. Be strong. Be patient.

All cell phone numbers are being released to telemarketing companies tomorrow and you will start to receive sale calls. YOU WILL BE CHARGED FOR THESE CALLS. To prevent this, call the National Do Not Call list at 888-382-1222.I made the call. It only took a minute. Making the call blocks your number for 5 years. You must call from the cell phone number you want to have blocked. If you want to know more, go to www.donotcall.gov http://www.donotcall.gov/


Non-Profit Highlight:

What: Red Ribbon for The Red Cross
When: September 25, 2008
What Time: 5:00 – 7:00 PM
Where: Northgate Point Office Complex
Why: Awareness wine tasting for the Red Cross
RSVP: RD@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

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