February 22, 2009

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
February 22, 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 = $113.12 (DOWN from $113.29 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 $130,937,800.

All Market Average Industrial Building Sale Price PSF = $75.29 (DOWN from $73.52 last week.)
We are currently tracking 91 industrial buildings for sale.
This is 1,298,119 square feet, which represents a total market value of $97,733,606.

Somewhat interesting Property for Sale or Lease:

UPDATES

104 North Tejon Street: This is a retail condo located in the heart of the downtown. The main floor plate is 3,400 square feet. What makes this space unique? The property owners have a brain! They’ve instructed us to get it leased at the current market rates. That means it’s offered for lease “at-the-market”, which is less than any of the other (they’re not leasing) competitive retail shops located in the downtown.

Northcom Business Center: This is a new project. You read correctly. A new project located at the SW corner of Platte & Powers, adjacent to the new west entrance of Peterson Air Force Base. This site was designed for large, multi-story office buildings with force-protection set-backs. You may not have heard much about it the continual expansion at Peterson. The city fathers have been working behind the scenes to lure Cyber Command and other relevant military missions to Peterson. New developments like this are an indication that our local market may not be as moribund as national pundits claim.

3788 Interpark Drive: This is a 2,800 sf industrial building & small lot located on Interpark Drive (near I-25 & Garden of the Gods Road). We were asked to sell it for any price. The Seller just wanted to get-away from the debt. We listed and sold it “at the market” the same day for $185,000. (FYI - deals get done, at-the-market.) http://www.hoffleigh.com/PropertyDetails.aspx?ID=378

6031 East Galley Road: This listing has 2 industrial buildings, (34,000 sf concrete tilt-up & 6,250 metal warehouse), on 5 ½ acres. It’s well suited for most industrial uses and could be alternatively used for a church or non-profit needing low-cost, large volume space. The price, at $39 psf, is about ½ of the average price for all-market industrial buildings.

825 North Circle Drive: The Seller’s in trouble and is looking for a partner or someone to take over his payments. The property’s had the Wig Lady in tenancy for nearly 25 years. This is a sleeper for someone with a strong-enough statement to assume the debt and wait for the market to turn. You can see the listing at: http://www.hoffleigh.com/PropertyDetails.aspx?ID=369

1721 West Colorado Avenue: $20,000 PRICE REDUCTION! This is a pretty neat deal; a small house, commercially zoned, on West Colorado Avenue. It’s 800 sf for $127,000. And truthfully, for the right user, it is a good deal. http://www.hoffleigh.com/PropertyDetails.aspx?ID=263

2760 North Academy Boulevard: This is a 13,177 sf office building with a firm asking price of $540,000 - that’s $40.98 psf. It’s located on the back of Palmer Park; the views are unbelievable; the parking is abundant; the property offers easy access on Academy Boulevard; the location & financial upside make this a winner. You can see the offering at http://www.hoffleigh.com/PropertyDetails.aspx?ID=206

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 asking price is only $50 psf.

13570 Meadowgrass: New Office-Condo project at I-25 & Northgate. Our prices are the lowest in the north I-25 corridor. If you are looking for an office-condo on the north-end with unbelievable views of the Air Force Academy & the Front Range this is the ticket. To view this property’s listing information, see the link: http://www.hoffleigh.com/PropertyDetails.aspx?ID=98

3729 Austin Bluffs Parkway: This is a retail condo for sale. The unit’s 2,075 square feet; it’s priced so a buyer would pay less in occupancy costs than if he were a tenant. This is a great option for someone looking to be near Academy & Austin Bluffs and wants visibility. This is a retail or office space. I’ve told many of my friends who are in retail sales, “Buy your building & you’ll build equity while you wait for your customers”.

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:

“Many’s the time I’ve been mistaken and many times confused.
Yes, and I’ve often felt forsaken and certainly misused.
But I’m alright, I’m alright, I’m just worried to my bones.
Still, you don’t expect to be bright and bon vivant so far away from home.

And I don’t know a soul who’s not been battered. I don’t have a friend who feels at ease.
I don’t know a dream that’s not been shattered or driven to its knees.

But its all right, it’s all right; we’ve lived so well so long.
Still, when I think of the road we’re traveling on; I wonder what went wrong,
I can’t help wonder what went wrong.”
An American Tune
Paul Simon

Want to hear the song? Follow the link. http://www.youtube.com/watch?v=l_sl4r0eGVY

Guys ask me how I can remain so upbeat, when it seems like the world is derailing. My reply is that I’m a natural optimist. My life is generally filled with good stuff. I’ve got a great wife; she cooks home-made soup. I mean, come-on, who cooks homemade soup? I’m reasonably healthy; our business is fairly robust and unlike the stock market, my golf swing is coming back.

Lest you get the wrong idea, it’s not all peaches & cream. Fireplace Gallery, a staple in one of our buildings for years, bailed last week. They said they couldn’t make any money so they were going to “shut-er-down”. Golly Goober; ah shucks; I asked what they wanted to do about their lease and they mostly just laughed. I did inherit several built-in fireplaces (that, at considerable cost, I get to disassemble & remove). And they said I was lucky. Reminds me of the one-eyed, one-legged dog whose tail was chopped off. You know him - his name is Lucky.

Then RNP Communications called and gave us the same story; then a travel agency did the same; then an insurance agency did the same; then a nurse provider service did the same. At some point the entertainment value disaappears.

I’ve read the statistics & talked to the guys. Last week the stock market closed down, and now sits 48% below its all time high (set in October, 2007). The NASDQ is down 71% from its tech stock bubble high, set 9 years ago.

I fondly remember the tech stock bubble bath. Next to my early childhood bubble baths, it’s one of my favorites. I remember thinking I was really smart. I accumulated 1,000 shares of Qualcomm. At one point it was moving up 20 – 30 points a day. Hell, I was smart! For the financially challenged, that means I was making $20,000 - $30,000 a day. Damn! Bob Hoff told me that unnatural markets can’t last – either up or down. (There’s good news in there for us now! This too shall pass.) I managed to sell; bla, bla, bla. You have to call if you want the rest of the story.

I’ve read the statistics & talked to the guys. In case you hadn’t heard, housing prices have tanked. 16% of homeowners owe more on their mortgage than its worth. Of buyers who bought in the past 5 years, 29% are “under-water” (That’s a nice euphemism for being screwed). Nearly 70% of option-arm borrowers are screwed; and they should be. That’s the penalty for being greedy & stupid. Maybe, when they write those loans they should insert a dumb-ass clause warning anybody who borrows with option arm that they’re going to lose their house.

By 12/31/09, Realty Trac expects more than 1,000,000 bank owned properties on the market representing 1/3 of all properties for sale in the US! Stop. Take a breath and think about that. They expect (nationally) every 3rd house for sale to be bank owned. Case-Schiller reported that home prices have fallen by an average of 21.8% from their peak in 20 major metropolitan areas; and they say, “We’re only ½ way to the bottom.”

I’ve read the statistics & talked to the guys. The Conference Board reports that consumer confidence is near its all time low. I live this statistic every day in meetings with almost everyone. I taught a class at the Colorado Mountain College over the weekend. The students, each & every one of them said they were fearful & anxious about the future; each & every one. A friend of mine, who manages a very large sum of money for a local bank, told me that, according to his indexes, the country is now more than twice as fearful about their individual financial prospects as they were just after the World Trade Center bombings. Where's the love? Great fortunes are made when everyone's scared!

I’ve read the statistics & talked to the guys. According to Calculated Risk.Com commercial real estate is just beginning to collapse. A lot of recently purchased commercial real estate was purchased at unrealistic cap rates. Note to self; unnatural price increases are unnatural. (I remember thinking that 1% & 2% cap rates didn’t make any sense.) Many commercial loans were made with overly optimistic pro-forma income projections. Many commercial loans repaid themselves out of interest reserve accounts. Here’s how it worked; you borrow money; the bank repays itself from the loan and then if you hustled and either leased or resold the property quickly, you’d never actually “make-a-payment”. What a country! Who’s more nuts in that scenario; the borrower or lender? Who’s the guiltier party? There’s something about a dumb-ass clause here, too.

According to Real Capital Analytics, 4,770 commercial buildings worth $107 Billion are already distressed or troubled. By class, office buildings are the worst offenders; industrial buildings are the least distressed.

I’ve read the statistics and talked to the guys, and I've found some good news! Mortgage rates have fallen. And even though it took 3.5 months, I just refinanced my personal residence at 4.75% on a 30 year, fixed rate note. There are deals to be made. Lise just bought 4 houses, a duplex and a cottage last week for her own account (she's a true contrarian). And, according to Fred Crowley, the average price appreciation over the past 5 years, including the past couple of real bad years, for homes in the Pikes Peak region has been about 3.12% year-over-year. That's good news.

There’s rising unemployment; real estate prices are melting; the stock markets is in the tank; nobody knows if they should be worrying about inflation or deflation; the prediction is for the funk to be deep, blue & long-lasting and my tooth aches.

I think it was Plato or maybe Sven Svenson that said, “What the heck? Hey! Somewhere in there, there is an opportunity!”

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, roofing 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 us - 719-630-2277.

Olson Plumbing & Heating
Johnson Moving & Storage

Call and ask how you can be added to our list.

Focus on Charity

The Salvation Army – they feed 52,000 meals per year
The American Red Cross – they do the emergency assist at every disaster in the Pikes Peak region
The Boy Scouts – they are 10,000 kids strong, and growing.
The Colorado Springs Chamber of Commerce
The Colorado Springs Economic Development Committee

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


Have a profitable week!

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