June 6, 2008

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
June 6, 2008

Attached are our weekly listings of all office, industrial and office condo property for sale in Colorado Springs. These lists are compiled by our research team. If there is a property that is incorrectly listed or if you are aware of a property that should be added to or deleted from our list, please let us know. You are receiving this information because of your previous request. If you wish to be removed from this list, simply send me a reply with that request. Alternatively, if you know anybody who should receive this information, please give me a head's up.

Over the past week, we have had 3 major price reductions on office buildings we have listed for sale. The obvious result of these price adjustments has been immediate, which affirms that there is a robust re-sale market for property that is appropriately priced to the current market conditions.

Building owner sentiment is about the same as it has been - continued uncertaintly about the future based on high fuel costs and the negative impact of those high costs on individual businesses, and the pending uncertaintly surrounding the fall election. One of my friends told me that his monthly fuel costs have increased $10,000 (monthly!) year-over-year, since the 1st of this year. So far, operative words - "so far", he has managed to not pass that increase on to his customers. And that he will is a given, its just a question of when.

It's is harder and hardeer to find qualified tenants so more Landlord concessions have been necessary.

Bryan Kinkaid, the local manager for SPCL Properties, who purchased the 2 large buildings (2860 South Circle Drive) behind the University of Phoenix towers, told me that he is offering 1 month free rent for each year of any new lease. As an enticement, they have bought-out several of his new tenant's leases to move to his property. Their group is very agressive. Most of his new tenants have been coming from his personal "cold-calling" efforts. His group paid about $25 per square foot for the complex and are in a position to "beat anybody in the market" when it comes to pricing. Furthermore, they have invested a "very significant" amount in improvements to attract new tenants.

Dan Giovanini, VP at American National Bank, told me that his "general business customers" seem to be doing "OK", but any customer who is in real estate continues to "take a beating". Mike Cafasso, President of ABC Bank reinforced Dan's statement. He told me that they are "working-out" of some troubled real estate, but generally, their non-real estate customers are doing "OK".

Newly retired Ft Carson Comandant, Col Mike Resty re-affirmed that the fabled, 25,000 new troops will actually relocate to Ft Carson by 2013. When relocated, they will increase (troops and family) the population of Ft Carson by 75,000!

This week:

The office market list shows 118 buildings for sale.
That's 1,132,336 square feet.
The total value of the market is $127,849,260.
That's an average sale price of $112.91.
In terms of economic impact, if the entire market sold, the total taxable commissions would be around $8,950,000.

The industrial market list shows 81 buildings for sale.
That's 1,621,783 square feet.
The total value of the makret is $111,173,525.
That is an average sale price of $68.55 per square foot.
If the entire market sold, the total economic impact would be the addition of $7,800,000 in taxable income to the city.

Our industrial building listing on Bandley Road sold last week in a pre-forclosure, short sale. That building was a special-use buidling constructed for the RV industry. As you might surmise, because of high fuel costs, there is no longer a robust RV industry. There were 6 liens on the property, which, in my opinion clearly demonstrates how out-of-control lending had become. Can you imagine being the guy in 6th place? Can you say, "oops?"

The office condo market continues to be very flat. The total market lists 89 office condos for sale. This includes new construction and 2nd generation space. The prices range from $44.00 per square foot (Metro Tech Condos - 545 East Cimarron) to $266.17 per square foot in Northgate Pointe (for a fully finished space).

Newly constructed to-the-shell condo prices range from $140 - $250 per square foot.
Finished condo prices range from $84.58 (Trestle Building basement) to $266.17 (Northgate Point - new, spec construction).
2nd generation condos price range from $44 - 200 per square foot.

My goal is to be a valuable commercial real estate resource for your. If our firm or I can address any specific commercial real estate questions you may have,
feel free to call my private cell line at 719-337-9551.

I would love to hear how your business is doing.

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