March 22, 2009

Tim Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
Leasing; Sales; Management; Buyer or Tenant Representation
4445 Northpark Drive, Suite 200
Colorado Springs, CO 80907
March 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 = $112.58 (UP from $112.37 last week.)
We are currently tracking 109 office buildings for sale.
This is 1,164,213 square feet, which represents a total market value of $131,064,900.

All Market Average Industrial Building Sale Price PSF = $75.80 (DOWN from $75.81 last week.)
We are currently tracking 96 industrial buildings for sale.
This is 1,342,305 square feet, which represents a total market value of $101,742,606.


Tim’s Market Notes:

I normally start work my work day at 4:00 AM. I know, during the day, it looks like magic, but trust me - there’s no magic at 4:00 AM! Today, I started a bit earlier so I could work on this column and because the change in the wind set me free! What are you gonnna do? Yesterday, it was 75; today, they’re predicting snow. The transition’s a killer for my nose. I’ll most likely sniffle all the live-long day. No pills help; no inhalers help. I’ll just sniffle. If you have a remedy, let me know.

They tell me I’m a Realtor. Although, I’m not really sure that’s what I am. I mean professionally. Yes, I spend my time hawking real estate, but most of my time is spent counseling. And for good reason; people need counseling. In fact, I’m fairly convinced that most people need Dad counseling. They need someone to tell them what to do. Can you relate? You’re a leader; you know exactly what I’m talking about. When the economy takes a dump & becomes more uncertain, more & more counseling is needed. People don’t do well with uncertainty and there's way too much of that going around right now. And uncertainty causes deals and situations that would otherwise go unnoticed to come to the surface. For example, take the case of a friend of mine.

He asked me to sell his building a few weeks ago. On the surface, it was a fairly simple assignment. The building’s a small industrial building located along I-25. It’s very clean. He said he bought it (for cash) for his business when times were good. Then times got a little yincy and he decided to “get some liquidity” by taking a loan. (Note to self – capital’s not created from borrowing.) Then his business got a little yincier and he couldn’t comfortably make the loan payments. Contextually, this shouldn’t have been that big-a-deal because the amounts involved were relatively small. However, it's the subtext that usually kills us.

We took the listing and went “under contract” within 24 hours and scheduled the closing for last Wednesday. Then the need for counseling started. When I received the settlement statement, I noticed an extremely high pay-off; how about this - for a $127,000 loan – the payoff was $67,000. Let that sink in. My friend was sold a loan that ultimately became the poster child for the financial crisis we’re now facing in our country. It was securitized and resold at least 3 times. To get a securitized loan, he had unwittingly agreed to egregious pre-payment penalties. He unwittingly signed-up for an 8 year “lock-out” where the pre-payment penalty was the aggregate interest cost that would have been paid had he stayed in the loan for the duration. And to add insult to injury, there was an extra 5% for good measure.

In a normal closing, my friend would have come away from closing with about $60,000. As it now stood, he would have to bring nearly $25,000, just to close. And unfortunately, he doesn’t have $25,000. The lender is in upstate New York. Guess how motivated he is to help. How this plays out is anyone’s guess, but the outcome will have to be creative and against convention. I’ll keep you abreast.

On a more positive note, I just finished reading the Operation 60ThirtyFive Report. This report’s a market assessment of our region & an assessment of our ability to compete in the global marketplace. I’ve been crowing for some time, that unless we realize, as a city we’re Joe vs. The Volcano, and unless we start working together as a community, we’ll be “a city that had great potential.”

The report was commissioned by our city fathers attempting to determine what we offer the global marketplace and how we promote that offering to stimulate economic growth. These are things we all need to be interested in. I’ve been teaching our HLI agents (that especially in troubled times) they need to determine what value they bring to the marketplace. I tell them to think of a jig-saw puzzle. Where do they fit in? How do they fit into the mosaic of the business community? The same ideas hold true for us as an economic region. The good news is, according to the report we’re well positioned to be competitive in the future global economy.

According to the report, to establish the Pike’s Peak region’s credibility in the New Economy we must:
1. Tell the world that we’re a good place to do business; (OK, that's a statement of the obvious);
2. Pay attention to (and properly fund) New Economy business opportunities. (For example, internet start-up’s; biotechnology; nano-technology or anything to do with science & research.)
3. Recruit & retain a young & talented workforce; I suppose a young & untalented workforce would be a mistake – I'm thinking of Detroit. A young and talented workforce is generally defined as a well educated workforce between 25 – 44 years of age; they’re the “creative class” and are normally a significant driver of economic development.

I’m very attuned to number 3 as it relates to me personally. Shannon & Holly moved-away but moved back. They come, husbands-in-tow. I’m lucky because I’ve been able to create employment options for my kids. Husband 1 is working at HLI; husband 2 is going to work at a Farmer’s Insurance Agency we’re starting. Holly’s working at HLI; Shannon’s going to work at Beth-El. They’re all young, well educated & vibrant & part of that creative class that we need to attract to help “grow” our future. Other parents aren’t so lucky. They don’t have opportunities to employ their kids. That’s why reports like 60Thirty Five are important. They point the way. They help us develop a region-wide plan for economic growth so all of our kids will have opportunity to go away and come back.

60 Thirty Five points to some interesting “key findings”. For example, we’re well educated; 94% of us done graduated from high school; 45% of us have (at least) an associates degree (that means we can type and write and do simple math; but, the percentage of the population made up of young professionals (25 – 44) is declining – see above.

Natural & cultural attractions make our region a destination for residents & tourists. OK, I didn't know that; well, intuitively I did. In fact, I always told my wife, “Why travel? People drive for thousands of miles to come here!” And, yes, as you surmised, our cost of living is low; but so are our wages; and yes, housing cost are low and commute times short; the women are beautiful, the men strong and the dogs smart. I know because I saw the bumper sticker that said my Beagle is smarter than your honor student.

We’re mostly a military town. There’s another surprise. Over 25% of us are employed by the government; about 110% are employed by the military. The area’s largest employers, in order, are Ft Carson; Peterson Air Force Base; The Academy and Schriever. Heck, even my wife married a GI!

Our commercial property lease rates are competitive vis-à-vis similar cities, but our commercial real estate is aging. I think that’s one of the most interesting things I learned from the study. I’ve never thought of “aging real estate” as a concept. It points to significant business opportunity, however, especially when you consider opportunities for in-fill re-development.

In terms of economic development, we don’t compete as well as our competition (Other cities of similar size and character who want to attract the same new business to their area.) because our economic development funding is so significantly less than our competitors. Think of playing ice hockey without a stick.

I have a copy of the study and can email it to you on request. Drop me a note at Tim@HoffLeigh.com


Here’s what we do:
Property Leasing; sales; property management; Buyer or Tenant Representation.
How can we help you today? Call us. We’re honest & trustworthy and doggone it, people like us.


Concierge Services:
We offer property management & maintenance concierge services. We have vendors for most property needs. 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; how you can become involved; how you become a “recommended vendor” call me: 719-630-2277.



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


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