February 1, 2009

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
February 1, 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 = $113.29 (DOWN from $113.38 last week.)
We are currently tracking 109 office buildings for sale.
This is 1,156,399 square feet, which represents a total market value of $131,006,800.

All Market Average Industrial Building Sale Price PSF = $73.59 (DOWN from $73.71 last week.)
We are currently tracking 91 industrial buildings for sale.
This is 1,284,119 square feet, which represents a total market value of $94,493,606.

Somewhat interesting Property for Sale:

UPDATES

2760 North Academy Boulevard: This is a 13,177 square foot office building with guaranteed income of $3,750 per month for 12 months (from 1/3 of the space). The firm asking price is $540,000. That’s $40.98 per square foot. Located on the back of Palmer Park, the views, parking, access, location and upside in the income make this a winner. If it’s such a winner, why’s it for sale or vacant? Good question. The Boy Scouts used to occupy the property and have recently moved from here to there. Don’t look a gift horse in the mouth. Look at this building; buy it and prosper! (This is the 5th least expensive office building for sale in Colorado Springs!)

3645 Jeannine Drive: This is a 47,596 square foot, multi-tenant, office/warehouse building, with offices on the 2nd floor and warehouses on the ground floor. I’ve been pitching the property for a few months. The price has continued to slide downwardly, until now, because we have 3 serious offers. I would expect this property to go under contract next week at $850,000. At $17.86 per square foot, this is the lowest priced for-sale property in the city. Somebody is going to get a bargain. If you’re interested in getting in the game, call me on Monday.

3707 Parkmoor Village Drive: This is a 2 building office project built in the 1908’s. The buildings are typical wood & frame construction. They are fully occupied by Mom & Pop, who normally occupy Class B property and who have Joe the Plumber’s credit. Once in place, Mom & Pop normally stay forever. The bank is considering a final offer and I expect to close this sale next week. The price? $47.50 per square foot. If the sale closes, this will be sold as the 4th lowest cost for-sale property in the market.

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!) we have lowered our prices to get a sale. As a percentage, we have reduced our pricing by 25%. 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.

5755 Industrial Place: This is a 15,351 square foot, multi-tenant industrial building for sale. I purchased this property some time ago with the idea of re-selling it to a government contractor who needs to near Peterson Air Force Base. It’s the very 1st building located next to the new West Entrance to Peterson. The asking price is only $80 per square foot ($1,228,000). With its location & the superior condition of the physical plant, this is a true-value.

2500 North Circle Drive: This is a signature building located at the corner of Van Buren and Circle Drive. It is a very clean, brick building with new HVAC and a 20 year roof. This is a pride of ownership property. It is 7,100 square feet; the tenant has just committed to a new 5 year lease; this is a solid 9% Cap Rate with annually increasing rent. This is a NON-Advertised property for sale, offered exclusively to you, to the readers of this column. The asking price is $825,000.

Want to know more? Tim@HoffLeigh.com
100’s of listings on our web site www.HoffLeigh.com.
719-630-2277

Tim’s Market Notes:

The economy is falling faster than the government can realistically respond. Ugh. But, much of what we are seeing today was seen before, so maybe there is hope in spite of massive government intervention. There is nothing new under the sun.

“The news about homeowners continued to be bad. A January report showed that in all of 22 cities surveyed, at least 2 in 10 households were late on their mortgage payments or in default.” Excerpt from newswire, circa 1934. The January 30, 2009 Gazette reported “Prices are collapsing and will probably drop another 15 percent. The median price for a home was $174,700 in December, down from $230,000 at the height of the boom and prices may not bottom until the 1st quarter of 2010.”

The National Industrial Recovery Act was given the task of expanding federally sponsored public works projects in order to provide employment & stimulate the economy. The 1933 ACT created the PWA (Public Works Administration) which was funded by $3.3 billion. (Think about scope and size - it takes 1,000 billion to make a trillion.) Now we have the “Emergency Economic Stabilization Act”, the “Auto Industry Financing and Restructuring Act”, and the “American Recovery and Reinvestment Plan” which will cost about $1 Trillion Dollars. Have you read Atlas Shrugged? Sound familiar?

I go to breakfast on occasion with a group of local businessmen. It’s stepping back in time to Jr. High School where all the nasty little boys get together on Monday morning, relive the weekend and pick on the fat kid. According to these breakfasts, how you ranked in the social pecking-order in Jr High School is most likely how you will rank as an adult. Damn, I’m glad I wasn’t a loser in Jr High!

The conversation turned on the economy and one of The Boys, Billy Bob made the brilliant observation that “the reason most small businesses fail is because their owners are dumb-asses.” I wonder how Cookie Driscoll, the owner of Cookie Driscoll, Inc., (Fairfield, PA) would feel about that statement. She epitomizes the typical small business. She wholesales gifts & office promotion products. In the past year, she’s seen 9 of her mom & pop shops shutter – most without paying their outstanding invoices. Her bank revoked her credit line. She expects her gross sales to be less than $60,000 this year. That’s down from nearly $250,000 last year. She’s taking a subsistence salary from her business and paying bills with money from her nearly depleted IRA. “I’m as close to panic as I’ve ever been”, she says. “This is the most terrified I’ve ever been in my life.” What’s troubling is how many times I’ve heard that same sentiment from small business owners across the city.

The National Federation of Independent Business says “more than 25% of small business owners report the current economic situation is threatening their ability to survive.” And these are not start-ups. These are businesses with long track records of previous success.

The NFIB says small businesses are a driver of the total US economy and “In the past decade, small businesses (less than 50 employees) have created around 75% of the nation’s net new jobs. Most small businesses don’t have large cash reserves (equity); they don’t have a lot of costs to cut”; and they are not able to secure a bailout. While on a recent trip to Kona, Hawaii, (yes, the weather was great; the water warm and the Palm Trees swaying), Lise and I went to the local out-door mall. It was hip, upscale; and new. Most, underscore most, of the stores had NO customers. At one point, I counted less than 20 people within eye-sight. The hotel occupancy’s were about 50%; the flight, in both directions was about 50%.

Back to The Boys. . . a couple of the guys have contracting business that mostly sold to the housing industry. They’re on their way out of the game. I was called to take a new listing this week. He’s an auto dealer; a small guy; a meat & potatoes kind of guy. He’s been in used auto sale business for nearly 30 years. He’s out of the game. (Grant Thornton’s Detroit office predicts that more than 3,800 of the 20,000 US auto dealerships will close this year.) I lost a very strong tenant in one of our buildings this week. He sold fireplaces. He’s out of the game. Two of my friends confessed they filed “BK” this week. They’re out of the game. A guy I know says he may have to quit his job and move home. Ah, yes, that would be his parent’s home; and with his wife and 2 kids. That’s inspiring. My toothache isn’t aching as much anymore. Take note, the 3.8% annual contraction in the GDP is real and impacts Joe & Mary Lunchbucket on Main Street & on the side streets of America.

I know a banker who’s collecting 7% on a significant loan from a friend of mine. My friend reasonably asked him to lower the interest rate or consider that he’d kill the goose who’s laying the golden egg. “Help me out!” was the cry. “Drop your rate”. “Can’t do that”, the banker says. “Our cost of funds is too great.” Excuse me? What planet is this banker from? You don’t need a degree in brain surgery to forecast this outcome; the bank will foreclose; they’ll transfer the asset to their bad asset file; they’ll have to build their equity reserve to compensate for the newly defaulted loan; re-sell the asset to somebody else at a discount; lose face-value on the note; and incur significant costs and penalties from the transaction. And all they would have had to do is accommodate my friend. The banker should have been at breakfast this morning. Dumb-ass.

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

Vendors we like:

We offer a property management & property maintenance concierge service where we can help you find any vendor for any property need. For example, if you need help with snow removal, electrical repairs, plumbing or heating or lawn mowing, we can assist with that work. We bill on an hourly basis. It’s like having a full-time property manager at a fraction of the cost. If you’d like to know more about this service, call me - 719-630-2277.

Focus on Charity

The Salvation Army - feeds 52,000 meals per year
The American Red Cross – does the emergency assist at every disaster in the Pikes Peak region
The Boy Scouts – 10,000 kids strong and growing

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

Have a profitable week!

Sincerely,

TJL
Tim Leigh
719-337-9551
Tim@HoffLeigh.com


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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