May 10, 2009

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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
May 10, 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 = $116.94 (UP from $113.09 last week.)
We are currently tracking 113 office buildings for sale.
This is 1,150,959 square feet, which represents a total market value of $134,589,900.

All Market Average Industrial Building Sale Price PSF = $79.39 (UP from $76.07 last week.)
We are currently tracking 97 industrial buildings for sale.
This is 1,309,336 square feet, which represents a total market value of $103,951,606.

Tim’s Market Notes:

Another gloomy day in paradise this morning; damn, I’m glad next Wednesday’s coming. I’m heading to the Sunshine State. A stay at the Don Cesar on St Pete’s Beach is just what the doctor has ordered for me. It’s what I need to get rid of the grey-sky blues.

It’s been a steady and exciting week in our world. We’ve seen leasing activity pick-up and our sales activity has remained steady. And Holly continues to inch ever closer to launching her 1st branch office. It looks like Akron, OH could become the home of a new Hoff & Leigh office in the very near future – way to go Holly!

ACTIVITY UPDATE: We went under contract on our listing at 627 East Uintah Street last week. This building is really cool. It’s a one-of-a-kind-of retro; just north of downtown, where School District 11 houses some administrative function. The asking price was $575,000 ($121 psf). It’s set to close in about 30 days at $106.07 psf. At that price it was the 49th least expensive small office building for sale in the market. I don’t think pricing was the number 1 issue with this sale. There are other buildings in the market for sale, for less, but the location was very important to the buyer as was the size. Mr. Buyer realized how challenging it’s become to find small office buildings for sale that don’t need a lot of renovation to bring them into the new millennium. When he found this, he immediately jumped at the chance.

And it looks like we’ll go under contract on 2760 North Academy this week. That’s the small building at the Offices at the Park. The asking price is $540,000 ($40.98 psf). The contract is full-asking-price. It’s a cash deal with a quick closing. Mr. Buyer is from out of town and recognizes a deal when he sees one. He’s buying at a discount. He’s a smart man, that Mr. Buyer.

I have concluded that the office building for sale market is mostly made-up of Posers. (Poser is kid-slang for someone pretending to be someone else). Many of the current crop of sellers doesn’t seem serious enough to sell. From what published listing prices show, it’s apparent that mostly, they’re “testing-the-water; they’re on a fishing expedition; they’re hoping someone will bring a bail-out; they’re looking for a stimulus. I’d call it wishful thinking. Cumulative listing prices tell me our market’s still living in fantasy land, where real estate prices never go down. Remember, Dorothy? She finally had to make it home of her own accord. The Wizard was just a short, bald, dumpy old-man with no real power. So, to help you find your way, recall this truism: “Properties that get play & sell are priced mark-to-market. The ones that aren’t, don’t.” And, in Colorado Springs, I consider the assessor, in most cases, to more accurately reflect true mark-to-market conditions than most of the current listing prices I see.

We currently track 112 small office buildings for sale representing nearly 1,200,000 square feet. Their collective average asking price is $121.88 per square foot. The tax assessor tracks those same buildings at his assessed market-value of $76.85 per square foot. There’s a price difference of $45.03 per square foot. On the basis of simple math, our market’s nearly $52,000,000 over-priced. And until we reconcile true values with current demand, sales will be flat. (How’s your value vis-à-vis this pricing information? Is it time for an adjustment? “I’m just asking; that’s all.” I’ve been preaching that there’s an impending inflation lurking about. It’s most building owners dream that my prediction comes true quickly. They realize that if they sell at today’s true market they’ll take a significant haircut. And most of the seller’s I know need a transplant, not a cut. They’d rather sport a mullet thank you.

And mercifully, we closed the sale of 110 south Sierra Madre last week. This is a warehouse located along the tracks, just south of Giuseppe’s. Over time, it was converted to office use and was most recently Carmichael Training’s headquarters. This was the worst real estate transaction I’ve ever been involved in; ever.

When I started this transaction, the Buyers and Sellers were my friends. The Buyers asked me to help them find a really cool building “along the tracks” in the downtown. While Sierra Madre wasn’t for sale, it fit the bill perfectly. I approached the owners and asked if they’d like to change hats and become sellers. They originally thanked me and politely said no. But when the price continued to escalate, they capitulated. Nobody held a gun to their head. They just determined that “WOW! That’s a spicy meat-a-ball!” (Note to Holly - at some price, everybody becomes a member of that famous working class; a member of the oldest and most respected profession. (And no, even-though the entry level is pathetically low, I’m not talking about real estate. Realtors are the 2nd oldest profession).

You can always count-on good old American greed! That’s the invisible hand so eloquently spoken about by Adam Smith. When one party wants something badly enough, he’ll pay what he needs to and people who reside at number 1 Principal Place move. I think Dr. Kochtu would call that price elasticity. Hmmm. As I was counting my totally ill-gotten gains, (that would be the huge, unearned commission which everybody knows, in all cases is too much; and by the way everybody knows Realtors make too much; don’t work hard & are generally the lowest form of scum on the earth!), the Buyer revealed that if his wife couldn’t be “part of the deal” he’d be cut-off. While I’m not exactly sure what he meant, I could only imagine that I should think back to the oldest profession.

Does the entire world revolve around that? You know - That. That, and banking, I guess. So much for homeruns, large fees and living the dream. Damn. The fun & entertainment just left the arena again. Now it’s just another day on the job. I drafted and obtained a fully signed, very tight, specific-performance contract; collected & distributed $200,000 in non-refundable earnest money and went about my business.

Then the classic-text-book case of Seller’s remorse set in. I instantly became the Wailing Wall; the dead-horse to kick (even though I didn’t recall dying recently); the anti-Christ; and the reason kids starved in Biafra in the 70’s. Is that still a country? Do those Igbo people still exist? In her honor today, I’ll recall the words of my dear departed Mother; “Eat all your vegetables, Timmy!. . . there are kids. . . ” And while I’ve been told I can be intimidating, and while I don’t really believe that, I didn’t know I was capable of leading people to drink, ruination & damnation. All over a building sale!

I could go on and on and on, but check this out. According to the tax assessor’s web site, the property’s 16,385 square feet. The assessor lists its current market value at $295,875. (That’s what he says the building should sell for; its fair, mark-to-market, market-value.) Furthermore, the assessor lists its assessed value at $85,800. How much was I able to sell the property for? $1,850,000. Ah, Tommy, that’s not a typo.

Here’s a crass commercial message – if you want a great seller’s agent, call Tim Leigh!

Of course I expect the Seller to fulfill his promise of filing a complaint against me for being a scumbag with the Colorado Real Estate Commission. Is being a scumbag a defensible position?

WE NEED HELP: If know anybody that’d like to become a member of the 2nd oldest profession, we’re hiring. We’re actively looking for a few good people that we can train into our commercial real estate business model & system. We’re also looking for a few residential sales associates who could go-to-work in our sister company Scumbag & Associates. (I’ve been told that I have to change the name when we become official – but from a marketer’s perspective, that’d be an entertaining name, eh?) If you know anybody who fits our profile, please give me a head’s up. I’d appreciate a referral.

Have a great week!

To view our most recent Colorado Springs Business Journal Ad please click below
http://hoffleigh.com/Doc/5.8.09.pdf

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