Tim Leigh’s Friday Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
September 5, 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 = $110.94 (Down from $111.66, last week.)
There are currently 138 office buildings for sale. There are 2 new listings this week.
There have been 10 newly listed office buildings for sale over the past month.
This is 1,383,647 square feet, which represents a total market value of $153,504,188.
All Market Average Industrial Building Sale Price PSF = $70.46 (Down from $70.57 last week.)
There are currently 97 industrial buildings for sale. There is 1 new listing this week.
There have been 7 newly listed industrial buildings for sale over the past month.
This is 1,784,963 square feet, which represents a total market value of $125,967,925.
All Market Average NEW-CONSTRUCTION Office Condo Sale Price PSF = $180.18
There are currently 50 newly-constructed office condos for sale.
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.
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.
New Office Buildings listed this week:
2723 North Nevada Avenue: 11,555 square feet, $887,500, $76.81 per square foot.
5525 Erindale Drive: 25,600 square feet; $2,250,000; 87.99 per square foot.
New Industrial Building listed this week:
415 West Pikes Peak; 43,439 square feet; $3,260,000; $75.05 per square foot.
Other interesting listings:
Bancorp Plaza is the newest multi-tenant office building in the downtown to hit the market. They have several thousand square feet available for lease. Prices range from $14.00 - $18.00 NNN (the NNN charges are estimated to be $8.00 psf).
5245 Centennial Boulevard is “price reduced” and is getting in the range of making sense as a condo conversion opportunity. This property is a multi-Tenant office project at the end of Garden of the Gods on Centennial Boulevard. It will not reach its full potential until the large vacant spaces on the Garden of the Gods Road fill. The building is 16,390 sf on 1.11 acres. The asking price $100 per square foot. The replacement cost would be around $150 psf. The idea would be to acquire, re-plat and wait. When the market turns, sell the individual condo units for $150 - $175 per square foot. The average 2nd generation condo sale price is $143.36. The average new condo, priced to-the-shell, sells for $180.18.
OK, maybe:
NNN Leased Investment: 9.43% CAP Rate, $2,225,000, $37.08 per square foot. This property is located in Tulsa, OK and was built in 1982. The building is approximately 60,000 square feet and divided into 2 rental units.
Are you kidding me?
Are you kidding me?
NNN Leased Investment: 7.16% CAP Rate, $8,995,000, $236.71 per square foot. Scottsdale, AZ. This is a 38,000 square foot, LA Fitness Club facility on a 15 year corporate lease with 3 five-year options. If you would like to know more about this property, call me right away – I have a bridge for sale.
I receive information on NNN investments from around the country, daily. For example, Taco Bell, McDonald’s, etc., offer long-term ground leases with CAP rates from 4.5% - 7.5%. We have the ability to place large or small investment sums locally or nationally. 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: This has been a typical week for me. I admit that I have one of the best jobs in the city because each week I get to meet new people. Most of the time, (except for the street people who live in our building on Fillmore Street, and who are usually new arrivals from Downtown or Denver), I meet bright, successful people who add value to the city. For example, last week I was introduced to the new director of the Philharmonic, Nathan Newborough. What a charming man. The Philharmonic board did a great job landing him. He will be a real community asset.
I met with a couple of car dealer friends who warned me, their sales, and all auto sales are down significantly. One guy told me that at his dealership (and these are dealerships, not “Joe’s Auto), their sales were off by nearly 60%, year-over-year. Both guys are considering the sale of excess dealership real estate with an eye toward reducing overhead and costs. One guy laid-off 11 employees on Wednesday. One of his victims was the man who hired him over 20 years ago. Talk about bitter-sweet pill. Obviously, reduced auto sales revenue means reduced sale tax collections, which means that the projected $25,000,000 shortfall in the city income continues to grow. I’m not sure the average guy realizes the connection between sales tax collection and the new asphalt running path on Mesa Road or city plantings, or (pick an amenity), that makes our city’s environment pleasing. According to a Gazette article this morning, prices for new cars are falling at the fastest rate ever recorded. Bad news notwithstanding, this sharp decline in prices may ultimately bode well for consumers, because at the end of the day, when the economy turns around, buyers should find the cost of owning a new car to be very attractive.
I’m working with 2 potential office-condo buyers who are moving their organizations to Colorado Springs. Both are software engineering companies. Both would employ between 20 – 30 new primary employees. I met with the EDC and they are energized by both companies. There are of plenty of state-offered incentives to entice employers to move here, but each principal said, “Incentives, while nice, are not why we’re moving here.” They both like the climate, the mountain-view and the exceptional quality of life. I guess we can continue to sell Pikes Peak after all!
I receive information on NNN investments from around the country, daily. For example, Taco Bell, McDonald’s, etc., offer long-term ground leases with CAP rates from 4.5% - 7.5%. We have the ability to place large or small investment sums locally or nationally. 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: This has been a typical week for me. I admit that I have one of the best jobs in the city because each week I get to meet new people. Most of the time, (except for the street people who live in our building on Fillmore Street, and who are usually new arrivals from Downtown or Denver), I meet bright, successful people who add value to the city. For example, last week I was introduced to the new director of the Philharmonic, Nathan Newborough. What a charming man. The Philharmonic board did a great job landing him. He will be a real community asset.
I met with a couple of car dealer friends who warned me, their sales, and all auto sales are down significantly. One guy told me that at his dealership (and these are dealerships, not “Joe’s Auto), their sales were off by nearly 60%, year-over-year. Both guys are considering the sale of excess dealership real estate with an eye toward reducing overhead and costs. One guy laid-off 11 employees on Wednesday. One of his victims was the man who hired him over 20 years ago. Talk about bitter-sweet pill. Obviously, reduced auto sales revenue means reduced sale tax collections, which means that the projected $25,000,000 shortfall in the city income continues to grow. I’m not sure the average guy realizes the connection between sales tax collection and the new asphalt running path on Mesa Road or city plantings, or (pick an amenity), that makes our city’s environment pleasing. According to a Gazette article this morning, prices for new cars are falling at the fastest rate ever recorded. Bad news notwithstanding, this sharp decline in prices may ultimately bode well for consumers, because at the end of the day, when the economy turns around, buyers should find the cost of owning a new car to be very attractive.
I’m working with 2 potential office-condo buyers who are moving their organizations to Colorado Springs. Both are software engineering companies. Both would employ between 20 – 30 new primary employees. I met with the EDC and they are energized by both companies. There are of plenty of state-offered incentives to entice employers to move here, but each principal said, “Incentives, while nice, are not why we’re moving here.” They both like the climate, the mountain-view and the exceptional quality of life. I guess we can continue to sell Pikes Peak after all!
Many people have told me that one of their biggest economic concerns is inflation. Here’s some interesting news - from July 2007 to July 2008, the Consumer Price Index was up 5.6 percent. That’s the largest increase in 17 years! And, while commodity prices have moderated, (They moderated as soon as I bought commodity-based stocks.), oil is still 75% higher than it was in 2007, and so far, for 2008, the dollar is down 10% against the Euro. The Fed appears to be ignoring inflation as they maintain their funds rate at 2% and continue to increase the monetary supply. Unless the Fed radically changes course and gets serious about inflation, the U.S. could repeat the hyperinflation we had in the ‘70s. If you believe that is the case, repeat after me, “Now is a Buying Opportunity!” I remember the good-old-days, when I bought a $49,000 house in Fargo, North Dakota at 17% interest!
Real Estate 101:
The top 4 Rules of real estate investing
1. Location
2. Price per square foot
3. Cash flow
4. Financing
At the end of the day, the savvy investor is looking for location and price per square foot above all else. Is the property in the path of growth? What is the sale price vis-à-vis the replacement cost? Then, consider the cash flow and the likelihood that with effort, the cash flow can be increased over time. Next, the savvy investor will consider financing options. Can a low-rate, non-recourse loan be obtained? If so, can the loan amortizing off-set a marginally higher sale price?
Want to know more? Contact me at Tim@HoffLeigh.com
Marketing 101:
Ways to attract prospects to your web site:
1. Know what your web site is for
2. Know your web site’s service area
3. Have high quality content
4. Keep your site focused
5. Advertise your web site address everywhere
6. Write and submit articles to article submission sites
7. OSEO
8. Pay – per click campaigns
If you want a copy of my full article, e-mail Tim@HoffLeigh.com
Non-Profit Highlight: The Tri-Lakes Chamber of Commerce and Hoff & Leigh are pleased to host The American Red Cross at a “no-ask” benefit, to heighten your awareness of their function in the community.
What: Wine tasting mixer to showcase the Red Cross
When: September 25, 2008 ~ 5:00-7:00 p.m.
Where: 13570 Meadowgrass ~ Colorado Springs, CO 80921
Half mile off I-25 and Gleneagle
What: You will enjoy a private tour of the Northgate Pointe office condos ~
Wine: Wine tasting by Carneros della Notte of Napa Valley, Dave Harmon, Vintner
Food: Heavy hors d’oeuvres ~
Entertainment: Live entertainment by International Music Syndicate
Sponsored by: Neighborhood Lending
RSVP: RD@HoffLeigh.com or Holly@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
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