January 11, 2009

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
January 11, 2009

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 = $112.46 (DOWN from $112.59 last week.)
We are currently tracking 104 office buildings for sale.
This is 1,120,142 square feet, which represents a total market value of $125,969,895.

All Market Average Industrial Building Sale Price PSF = $73.71 (DOWN from $73.82 last week.)
We are currently tracking 91 industrial buildings for sale.
This is 1,284,185 square feet, which represents a total market value of $93,803,606.

Somewhat interesting property for sale:

2760 North Academy Boulevard: THIS IS THE BEST VACANT BUILDING SALE ON THE MARKET. 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 the best opportunity for a value added investor in the market. At the current list price, $850,000 it’s only $17.90 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. 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 $17.90 + $8.72 = $26.62 psf. You can’t frame a building for that. 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: A DIAMOND IN THE ROUGH. STORE YOUR TOYS. This is a very clean, auto shop building that sits atop Motor City Drive. The Seller’s 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. The property is 2,952 square feet on a 9,700 square foot, fenced lot. There are 2 overhead doors, with 3 service bays. 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.

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.

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, www.HoffLeigh.com.
719-630-2277

Tim’s Market Notes:

There’s something reassuring about a dog. If you don’t have a dog, you won’t understand. If you have a dog . . . There’s something reassuring about a dog. Especially a dog, vulnerably turned upside down on your Sunday morning bed; puppy breath & dog feet. There’s something reassuring about a dog. They patiently wait at the top of the steps; they love you without precondition; the smother you with licks and let you rub, pet and scratch them. There’s something reassuring about a dog. Dogs bring order in chaos. Dogs remind you that “all’s right in the world” despite of the pundits & papers. There’s something reassuring about a dog.

Then, my friend in Anchorage reports, “A convicted sex offender won a $500,000 Alaska raffle that was a fundraiser for a non-profit organization that helps victims of sexual abuse.” Seriously, you can’t make this stuff up! The winner had been convicted of 2 counts of sexual abuse of a minor in 1993 & 2000; he won the Friday night drawing and plans to use the money to buy a home & improve his life. Nice. I noticed that Anchorage was not on the list of “Top 100 Places to Live & Start a Business”, but Colorado Springs was. There’s something reassuring about a dog.

Ranked number 28 on the CNN’s list, our story is, “Colorado Springs has diverse industries that range from computer chips to Christ.” Fargo, North Dakota was ranked number 24. The highlights of living and starting a business in Fargo include “the low cost of living; one “hip” hotel (the Donaldson); the short commute to work and a 2% unemployment rate.” The low-light is the long, cold winter where the average January temperature is -2F.

I know something about Fargo. I grew up just 70 miles north, where as a kid I learned to play ice-hockey on ponds and skated on frozen, ice packed roadways to Central Park. At 15, I celebrated my 1st communion on Sunday morning with the rink attendant. As I recall, it was French fries a shot of Jack. Why Fargo gets a 1,500 employee Microsoft Campus and a new $70 million expansion and we don’t is an interesting question. That cold weather and Jack; It must keep those darn NoDak’s head’s clear and competitive. Or maybe there’s something to their story; something about collaboration without worry about keeping the Lion’s share of the budget and credit. There’s something reassuring about a dog.

But, not-to-worry; we’re assured by our father in Washington that they’re going to fix everything. There is something reassuring about a dog.

What - Cost

Economic Stimulus Act - $166 Billion
Bear Stearns Bailout - $ 29 Billion
Student Loan Guarantees - $ 9 Billion
Fannie & Freddie Bail-out - $200 Billion *Because they are too big to fail!
FHA rescue - $320 Billion
Auto industry “efficiency loans” - $ 25 Billion *Ya gotta love what they call this stuff!
Troubled Asset Relief Program - $700 Billion *This is the free money given to the banks.
Money Market Guarantees - $659 Billion
Commercial Paper funding - $1.4 Trillion
Unemployment benefit-extensions - $ 8 Billion
AIG Bailout - $152.5 Billion *And travel fund.
Citi-Group Bailout - $300 Billion
Term Asset Backed Securities loan facility - $200 Billion *Can someone tell what this is?
GSE mortgage backed securities purchases - $500 Billion
GSE debt purchases - $100 Billion
FDIC Bank takeovers - $16.7 Billion
Obama’s new plan - $1 Trillion *Now with newly announced earmarks

Don’t worry. If you don’t recognize some of these programs - the guys in Washington know what they’re doing. There’s something reassuring about a dog.

And where will the money come from? Brother can you spare a dime? According to a report I read at www.CNNMoney.com “The 2009 US Budget deficit is expected to spike to a record $1.2 Trillion, or 8.3% of the GDP.” The Gross Domestic Product is the sum total of our economy’s output. Many economist worry when the deficit exceeds 3% of GDP and start to think of bad stuff, like financial implosions or “significant” inflation when it reaches 6%. Now, as you know, I’m not a doom & gloom kind of guy, but as it relates to my world, real estate, this information has big implications.

The smart guys have been predicting de-leveraging of our assets. And we are living that dream. Now according to many writers, that’s the root cause of our economy’s problems. My planning advice: I’m predicting higher taxes & high inflation. “Ladies & Gentlemen, park your assets accordingly.” (By the way – do you want to bet against the government and its policies and win? Here’s a tip: buy an asset where you can leverage your investment with long-term, fixed-interest-rates and I guarantee you’ll win big. If you want a proven strategy, call me 719-337-9551 or write me Tim@HoffLeigh.com .)

According to Mark Lieberman, “There probably aren’t enough adjectives to describe the unemployment report that showed the economy shed another 524,000 jobs in December.” According to the government, that’s a total of around 2.6 million lost jobs in 2008. Lieberman goes on to say, “The more significant number is that 39% of Americans over the age of 16 are not working.” These figures compare to The Great Depression, when those rates reached 24.9% in 1934. Not to worry; in his “major” speech earlier this week, Obama said “Only the government can provide the short-term boost necessary to lift us from a recession this deep and severe.” There’s something reassuring about a dog.

Where does the rubber hit the road? Lisa Brake separated honorably from the US Air Force as a Captain. She was making $83,000 per year. She says, “I thought I’d find a job easily. I have 3 degrees and I live in Colorado Springs, a town with a large pool of government & military related jobs. But after an 11 month search, I was offered only 1 job, as an IT specialist. It’s a great job with benefits, but it only pays $36,000. I was stunned. I’ve worked hard to get the education I need to be employable. I took a 55% pay cut out of desperation. It was a hard decision, particularly because my husband is underemployed; he used to work in aircraft maintenance - now he’s a home theater installer.”

At the end of the day, keep your buildings looking great; keep your rents low; keep your powder dry and plan to stay the course. There’s something reassuring about a dog.

If you have interest and want to read a very interesting article about how we arrived at this place, read the following:

http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom

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