December 29, 2008

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
December 29, 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 = $110.59 (DOWN from $111.13 last week.)
We are currently tracking 106 office buildings for sale.
This is 1,163,079 square feet, which represents a total market value of $129,254,895.

All Market Average Industrial Building Sale Price PSF = $73.82 (DOWN from $74.04 last week.) We are currently tracking 92 industrial buildings for sale.
This is 1,286,685 square feet, which represents a total market value of $95,268,606.

Somewhat interesting property for sale:

2760 North Academy Boulevard: This is the small building at The Offices at the Park. The price was dropped from $750,000 to $540,000 which now makes it for sale at $40.98 per square foot. At this price, it is a great value. The property needs to be re-tenanted. The physical plant it in good condition with no apparent roof or HVAC issues. There is plenty of parking.

3645 Jeannine Drive: This is like an auction. I’m lowering the price again. You will have to call to find out what the deal is. This is the best opportunity for a value added investor in the market. At the current list price, $995,000 it’s only $20.91 psf. This property had been listed at $1,650,000; we reduced to $1,100,000 and now we’re really seriously-in-the-game for only $20.91 per square foot. This property has a firm remodel budget of $415,000 ($8.72 psf), which includes a new roof, new parking lot, new HVAC and lipstick. When it’s all done & said, this all-in investment would be $20.91 + $8.72 = $29.63 psf. As you know, you can’t frame a building for that cost. This deal produces a newly constructed, multi-tenant building with tremendous lease-up & value-added opportunity. When completed, this project, leased-up should generate between $25,000 - $30,000 per month in gross rent. This is a case study where someone buys low, adds value and thereby increases his balance sheet and income.

In case you missed the description over the past few weeks, the building is a 47,596 sf mixed use facility with warehouse on the ground floor and many small offices littered across the top floor. It is located just south of Austin Bluffs, just west of Academy. The warehouse space should lease-up for $5.50 psf modified gross and the offices should lease-up for $9.00 psf modified gross. The presumption is that the Tenants will pay rent plus utilities, snow removal, janitorial and landscaping charges.

905 Motor City Drive: This is a very clean, former tire shop that sits atop Motor City Drive. The Seller’s are very interested in getting this property off their books, now! The original listing price was $375,000. The new price, for a quick sale is $260,000 or MAKE AN OFFER. The property is 2,952 square feet on a 9,700 square foot, fenced lot. There are 2 overhead doors, with 4 service bays. For an extra $5,000, the deal could include 2 auto lifts. Here’s the value added; buy into Motor City at today’s, currently depressed pricing; lease or use the property for 3 – 5 years and sell for a profit. And, yes, Mitch, there are auto shops still-standing who would rent this building. Or use it for your toys; or share it with a friend with toys like yours; or use it as a club-house. Your wife, most-likely, really would like some time away from you.

3116 Century Street: This is a very clean, multi-tenant investment property that is being sold as part of an estate-liquidation. A friend of mine has owned this property for over 20 years. It is extremely well maintained and well tenanted with class B warehouse users. The typical bay is 1,500 square feet and the typical rent is about $12.00 psf gross. Bob Hoff priced it, so I know it’s reasonably priced. As Bob always said, “the cow is only worth as much milk as it produces.” Its 13,000 square feet. The asking price is $830,000, which is only $63.85 psf, which is $10.19 less than the market average, for an above average property.

13570 Meadowgrass: This is our office condo project. True to market dynamics, and true to the advice I dish-out, as painful as it is, (which goes to show, I share your pain!) I have dropped-my-pants to get a sale. As a percentage, we have reduced our pricing by 20%. For office condos on the north end; with I-25 visibility and unbelievable views of the Air Force Academy & the Front Range, this is the ticket.

3707 Parkmoor Village Drive: UNDER CONTRACT. This is a bank repo. They were very interested in selling; they lowered the price and the buyer showed up as predicted. The asking price was $60.00 per square foot. This is selling a 10% cap rate. The physical plant’s in good condition. This is a cash-cow. The tenants are B rated and on short term leases, but generally, with buildings of this class, once the tenant is in place, they stay in place.

5030 Boardwalk: THE SELLER IS MOTIVATED. MAKE AN OFFER. This is an exceptional deal because of the financing. The Seller will carry the mortgage on soft terms. Also, this is a USER SALE. The property is a good example where there has been a diminution of value because of a waning trade area. The building is clean and doesn’t need modification. Typically, a user/purchaser would utilize 1 of the 4 rental units and lease-out the other 3. The building is 6,383 square feet and priced at $84.60 per square foot ($540,000). The Seller would guarantee that vacant space leases.

Want to know more? Contact me Tim@HoffLeigh.com
View 100’s of listings on our web site, http://www.hoffleigh.com.
719-630-2277

Tim’s Market Notes:

I don’t know what your Christmas was like, cold most likely, unless you’re my friend Lee, in Australia, where it’s warm this time of year. Personally, I knew that if I didn’t leave town, I’d spend Christmas day working. And, how boring does that sound? And how stupid? What can I say?

So, it was “off to San Francisco” and a visit with the kids. It was a great trip. We saw Phantom of the Opera; hiked the pristine coastal wetlands just north of the Golden Gate Bridge; and saw more people with nothing to do that I’ve seen in one place. In fact, I didn’t know there were so many people with no place to be and nothing to do until we spent the morning at Fisherman’s Warf!

I thought about our commercial real estate market and knew you’d be interested in some of the following statistics furnished by Paul Turner. Mr. Turner publishes a quarterly report outlining the state of commercial real estate in the Pikes Peak region. According to Turner’s database, only 190 office buildings have sold in Colorado Springs since 2000. Not believing that statistic, I called Paul. He told me not to panic. That in fact, nearly 685 office buildings have sold, but he has only been able to secure good sale data on 190 of them. Something about cooperating real estate brokers; for sale by owners and pocket listings!

Virgil McCormack always told me, “Figures lie and liars figure.” So, how do the figures lie?

Year - Asking Price PSF - Selling Price PSF - Total SF Sold

2000 - $100.95 - $ 93.21 - 123,560
2001 - $ 99.25 - $ 87.67 - 268,969
2002 - $104.96 - $ 88.72 - 196,642
2003 - $ 83.35 - $ 78.68 - 132,624
2004 - $ 89.68 - $ 78.72 - 249,131
2005 - $100.43 - $ 92.80 - 276,376
2006 - $111.31 - $104.09 - 217,167
2007 - $138.35 - $125.03 - 217,419
2008 - $90.71 - $81.27 - 177,911

The best year to have been a seller was last year; oops, did somebody say, “a day late and a dollar short?” The price declines we have seen so far this year have been substantial and they will be called dramatic by the end of 2009.

Then, finally, some good news. The Economic Development Corporation (EDC) said they have tracked 1,287 new jobs that will “come-on-line” in Colorado Springs over the next 3 years, generated from 13 EDC assisted companies. The financial impact from these 1,287 primary jobs is the creation of a multiplier of 2.5 new local jobs, or the equivalent of 3,218 new jobs. They are sure to have a nice, financial impact on the region.

And Major General Mark Graham said that the fabled 12,000 new troops, who have been forecast to arrive at Fort Carson is a done deal; the orders have been cut and we should expect to see the troops clogging up our roadways by mid-summer. According to smart people who figure this stuff out, each new troop will have 2.5 dependants attached to him/her. The net effect will be a swelling population – to between 25,000 – 30,000 new people moving to Colorado Springs over the next few months.

While it is easy to get lost in the TARP, Madoff and other grave financial issues of the day, it will do us all good to remember that, according to Little Orphan Annie, “The sun will shine tomorrow.”

Happy Holidays!

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

Focus on Charity

What: The Salvation Army
When: 52,000 meals per year
Where: The New Hope Center
Why: People are cold & hungry and not able to care for themselves
How: Contact The Salvation Army and make a donation

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