March 1, 2009

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
March 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 = $112.96 (DOWN from $113.12 last week.)
We are currently tracking 109 office buildings for sale.
This is 1,153,643 square feet, which represents a total market value of $130,318,900.

All Market Average Industrial Building Sale Price PSF = $75.24 (DOWN from $75.29 last week.)
We are currently tracking 93 industrial buildings for sale.
This is 1,311,499 square feet, which represents a total market value of $98,683,606.

Somewhat interesting Property for Sale or Lease and Updates:

6208 Lehman Drive: This is the showcase property at the corner of Lehman & Academy. It needs some love. Nearly 25,000 sf on 3 floors; it’s priced at $78.20 psf ($1,900,000) with some room. Clean-it-up; install an elevator; hit a home-run. http://www.hoffleigh.com/PropertyDetails.aspx?ID=85

104 North Tejon Street: This is a retail condo located in the heart of the downtown. It’s 3,400 square feet plus a 5,700 sf basement. The owners are realistic about their pricing model & have asked me to move-it-quickly. As you know, the downtown’s expanding its employment base; so now’s a good time to negotiate a long-term lease in the right retail location; the unit could be purchased with attractive Seller financing. If you know anyone that wants to be treated like the family you like, have them call me.
http://www.hoffleigh.com/PropertyDetails.aspx?ID=383

In surveying the retail space lease-rates on Tejon Street last week, we found pricing from $15.00 gross - $22 NNN. Equity has 2 properties next door to each other; 1 for $12psf and the other for $20psf. I’d say that comes under the guise of “the art of pricing.” The average is around $16.00 NNN.

3788 Interpark Drive: Sold this the same day we listed it! This demonstrates that there’s an active commercial real estate market for property that is priced “at the market”. It’s a 2,800 sf industrial building & small lot located on Interpark Drive (near I-25 & Garden of the Gods Road). It’s set to close in 30 days for $185,000. http://www.hoffleigh.com/PropertyDetails.aspx?ID=378

825 North Circle Drive: The Seller’s in trouble & looking for someone to take over his payments. The property’s had the Wig Lady in tenancy for nearly 25 years. It’s a sleeper; assume the debt & wait for the market to turn. http://www.hoffleigh.com/PropertyDetails.aspx?ID=369

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. http://www.hoffleigh.com/PropertyDetails.aspx?ID=73

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. http://www.hoffleigh.com/PropertyDetails.aspx?ID=132

3729 Austin Bluffs Parkway: This is a 2,075 sf retail or office condo for sale. It’s priced so a buyer would pay less in occupancy costs than if he would as a tenant. It’s a good option for someone looking to be near Academy & Austin Bluffs and wants visibility. http://www.hoffleigh.com/PropertyDetails.aspx?ID=82

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

It’s another blue-bird day in Colorado Springs. I look-out across the early morning roof-tops and see the partially snow topped Pikes Peak; breath-in the crisp morning air and wonder what the heck I’m doing working on a Sunday morning. All I can say is, I’ve chosen not to participate in the current down-turn and my staff and I are working hard to maintain our position in the market. I’m driven, because every week I meet new tenants & building owners who tell me they’re “shutting it down.” The market’s killed them and we don’t want to become a statistic. Trying to be an encourager, repeat my mantra, “Control what you can; be the best at what you do; don’t worry about what you can’t control; work hard; focus local”. And, each week, I’m made aware of another good company that’s been run-over by the train wreck. Last week it was a fireplace company and a cabling company; both were tenants in our buildings. You lose rent; they’re uncollectible; what do you do? You move-on. You look long-term; you exercise patience; you anticipate better days.

And, last week the unthinkable happened. Berkshire Hathaway reported that its net income dropped 96% in the 4th quarter. When I read that, I was so amazed that I thought I’d read Buffet’s letter to his shareholders to see what happened. Buffet says the economy will be in the tank for 2009 and likely, “well beyond”. With the infusion of the Obama money, he foresees “an onslaught of inflation,” which is what I’ve been predicting for the last 24 months. Maybe there’s a career move for me - as an Oracle. The only way the government can forestall a deep depression is to inflate the economy. Debtors win with inflation. The best strategy for repaying debt (whether you’re the government or an individual) is to make the debt less valuable with inflation and thereby repaying it with relatively meaningless dollars. That that’s going to happen is not questionable; how you position yourself to take advantage of those circumstances are. As Hamilton said, “The rich & affluent take advantage of any economy and always end-up on top”.
While we have not reached the bottom of the local real estate market, yet, I believe we’re close. I also believe that now is a good time to buy. Hard assets will inflate. With inflation, debt will become less consequential. It’s historical; not rocket science.

Here’s Berkshires letter to their investors:

BERKSHIRE HATHAWAY INC.
To the Shareholders of Berkshire Hathaway Inc.:

Our decrease in net worth during 2008 was $11.5 billion. . . 2008 was the worst year (for Berkshire Hathaway, Inc). 2008 was devastating as well for corporate and municipal bonds, real estate and commodities. By year-end, investors of all stripes were bloodied and confused, much as if they were small birds that had strayed into a badminton game.

As the year progressed, a series of life-threatening problems within many of the world’s great financial institutions was unveiled. This led to a dysfunctional credit market that in important respects soon turned non-functional. The watchword throughout the country became the creed I saw on restaurant walls when I was young: “In God we trust; all others pay cash.” By the fourth quarter, the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country. A freefall in business activity ensued, accelerating at a pace that I have never before witnessed.

The U.S. – and much of the world – became trapped in a vicious negative-feedback cycle. Fear led to business contraction, and that in turn led to even greater fear. This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone “all in.” Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.

Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly. Whatever the downsides may be, strong and immediate action by government was essential last year if the financial system was to avoid a total breakdown. Had that occurred, the consequences for every area of our economy would have been cataclysmic. Like it or not, the inhabitants of Wall Street, Main Street and the various Side Streets of America were all in the same boat.

Amid this bad news, however, never forget that our country has faced far worse travails in the past. In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21 ½% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. America has had no shortage of challenges.

Without fail, however, we’ve overcome them. In the face of those obstacles – and many others – the real standard of living for Americans improved nearly seven-fold during the 1900s, while the Dow Jones Industrials rose from 66 to 11,497. Compare the record of this period with the dozens of centuries during which humans secured only tiny gains, if any, in how they lived. Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so. America’s best days lie ahead.

During the past 44 years of Berkshire Hathaway’s existence, in 75% of those years, the S&P stocks recorded a gain. I would guess that a roughly similar percentage of years will be positive in the next 44. But neither Charlie Munger nor I can predict the winning and losing years in advance. (In our usual opinionated view, we don’t think anyone else can either.) We’re certain, for example, that the economy will be in shambles throughout 2009 – and, for that matter, probably well beyond. . .

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

Concierge Services:

We offer a property management & maintenance concierge service. We can help you find vendors for most property needs. For example, if you need snow removal, electrical, plumbing, heating or roofing repairs; or lawn mowing, yard-clean-up; sprinkler system repair or installation; we can help you. 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. Below are some of the vendors we do business with. (If you want to see a list of some of the vendors we like, see the attachment.)

Focus on Charity
We’re committed to being active community partners. We endorse & support the following charities & non-profit organizations. In spite of challenging financial times, we hope you’ll remember the financial needs of your favorite charity or non-profit. If you don’t have one, these guys could use your help. They add significant value to our community & quality of life.

The Salvation Army: Feeding 52,000 people every year.
The Red Cross: They provide emergency assistance at every disaster in the Pikes Peak region
The Boy Scouts: Assisting 10,000 kids in the Pikes Peak Region, they nurture young men into responsible adults.
The United Way: Everybody’s partner in funding non-profits.
Chamber of Commerce: The business community’s voice in local politics.
Economic Development Committee: Helping the city grow jobs and employment.

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