Hoff & Leigh’s Weekend Market Report
Hoff & Leigh, Inc.
Leasing, Sales, Management, Buyer Representation
4445 Northpark Drive, Suite 200
Colorado Springs, CO USA 80907
June 1, 2010
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All Market Average Office Building Sale Price PSF = $101.99 (UP $1.65 from last week)
We are currently tracking 84 office buildings for sale.
This is 772,819 square feet, which represents a total market value of $77,542,314.
All Market Average Industrial Building Sale Price PSF = $95.83 (DOWN $2.52 from last week)
We are currently tracking 70 industrial buildings for sale.
This is 877,378 square feet, which represents a total market value of $81,869,406.
To view our most recent Colorado Springs Business Journal Ad please click below
http://hoffleigh.com/Doc/5.28.10.pdf
Tim’s Market Report
Daniel Borsten, the former Librarian of Congress wisely said that “trying to plan for the future without a sense of the past is like trying to plant cut flowers.”
And one of our advantages as a community is that we know our past; we know our history and we know our heritage. In fact, we know our founders and their intention. We know 1871. We know General Palmer’s intention was the creation of a high-quality resort community. It was quickly nicknamed “Little London” because of the many English tourists who came. We know 1873. We know when the Antler’s Hotel opened it welcomed US and international travelers and health-savvy individuals seeking the high altitude and dry climate. We know Dr. Bell; Irving Howbert; Hagerman; Simmons; Count Portales; Stratton, Penrose & Tutt. In fact, if we look to our history we can find our future. And while it’s important to recall our founders and their successors as immortal, it’s just as important to recall them as mortal because as visionary as they were, they were just as flawed and imperfect as we are. They were merely stirped in time and did the best they could with what they had.
Our founders knew their “Colorado Springs” experiment was an unfulfilled promise and that our work would never be complete. They knew we’d be called-on to make continuous improvements, and that there would be never-ending flaws to correct, unfinished business to attend to, adjustments necessary to keep-up with the torrid pace of growth and change and opportunity, and that the job would never be complete. They were visionary and now that’s our call.
“Those brave, high minded people of earlier times gave us stars to steer by . . . and from them, in our own dangerous and promising present, we can take heart, (because) blessed we are and duty bound to continue the great cause . . . in their spirit and in their memory and for those who are to carry-on next in their turn. There is still much work to be done; still much to learn. And, on we go. . .”
Dave is our really bright analyst. One of Dave’s claims to fame is, at one time he owned the largest building in the state of Montana – so we know he has some experience! His other claim to fame is his infamous statement, “I’ve been rich and I’ve been poor and being rich is a whole lot better!” Now, Dave’s using his experience to help us navigate choppy waters by providing us with timely market data so we can make intelligent business decisions.
This week, Dave reports the office & industrial markets are still (significantly) over-valued. He says the office market is $23,759,325 overvalued and the industrial market is $29,824,042 overvalued. Furthermore, he says the average asking price for an office building is $100.34 psf where the assessor says it should be $69.59 psf; and he says the average asking price for an industrial building is $93.31 psf where it should be $59.32 psf. There is a moral; either you have the only property in the market that’s worth what you think it’s worth, (ah, congratulations – I’m sure you do!), or you’re going to have to drop-your-price and come into alignment with Mr. Market. Ah, yes, that wily Mr. Market. You know him. He’s kind of like Snidely Whiplash from the Rocky & Bull Winkle cartoon. He’ll lay you on the track, bind you tightly and let the train run-you-over! And trust me; there’s no love in River City and Dudley Doright’s retired.
And the interesting thing about real estate investors is the optimism. We never want to recognize a loss. Unlike the stock market where value’s immediately recognized, our world’s a surreal episode from the Twilight Zone; our world’s like a slow moving freight train, cars slowly crashing one-into-another, crumbling agonizingly slowly, until pushed by inertia from the last car, we fall off the cliff.
So, Mr. Buyer came into see me a couple of weeks ago. His story was that he proudly purchased a small office building in the Lehman Drive area from Mr. Seller who financed the sale. It was something like a 6,000 sf building for $650,000. At the time, it seemed like a great idea. At $100 psf, the price was in the sweet spot. Mr. Buyer was going to operate his business from the building and have a couple of tenants help pay the mortgage. In theory, over time, Mr. Buyer would pay-down the debt and live off the fat of subsequent tenants! At least that was his story and it was a damn good story at the time. Mr. Seller (aka Mr. Note Holder) thought he had hit a home run. He moved south, comfortable that his income was secure and was “there” for his retirement. At least that was his story. Makes me think of another story where Cinderella meets Alice in Wonderland.
Unfortunately, something happened on the way to the Forum. The market tanked; nobody wanted Mr. Buyer’s stuff; he couldn’t pay the mortgage and his freight train crashed into itself. Mr. Buyer had come to me hoping I could show him how to grow hair on his bald spot. And that’s when the Queen told Alice, “Why, sometimes, I’ve believed as many as six impossible things before breakfast!” I told him that he needed to have a frank discussion with Mr. Seller. Their relationship had impossibly changed; they were no longer Buyer/Seller or Borrower/Lender; they were partners.
Then Mr. Seller came to see me. I told him the same thing - partner. He didn’t like my advice and he didn’t like my price. He subsequently listed his property for sale with Brand X. Good luck with that. Hey, here’s a news flash! Mr. Market’s not to be trifled with and as I used to tell my Coronado High School hockey guys, “Sometimes you can fool Mama and sometimes you can fool Papa, but you can never fool the man in the mirror.” Real estate prices not at the market are merely entertainment.
From the Campaign: I have been spending the weekend at Territory Days meeting folks (well, actually, “I’ve seen green alligators and long-necked geese, some humpty backed camels and some chimpanzees; some cats and rats and elephants, but sure as you’re born, I swear I saw a Unicorn.”) and telling my story; that we can do better. That our next crop of leaders must be visionary - not reactionary; that we must look to the next 50 years not the next 50 weeks; that we must restore Colorado Springs to its rightful place & position as a World class destination in the global marketplace and that by working together, we can prosper. And, yes, the Mayor’s job is full-time.
Ah, and the intrigue, and just so you know, I can’t make this up because it’s too weird; while I was on a short break from my booth duties, a “Mr. Sterious” showed up and told RD and Todd “there’s a mounting conspiracy being hatched to debunk Tim’s candidacy.” He claimed a local paper was “out to get Tim Leigh” as soon as I become a wolf pack of more than one and that “there is a sitting council person who is planning to run for Mayor, make it ugly and beat Tim like drum.” Mr. Sterious, in certain conspiracy fashion, would not leave his real name. . hmm . .
And, I have spent a considerable amount of time meeting with the managers and employees of the city. And I’m continuously amazed that, in spite of the fact that I’ve been “running for mayor” for months, I still haven’t found the bogey-man. I haven’t found one city employee who’s stealing our money. I haven’t found one city employee who didn’t truly care about our city. (And yes, I saw last week’s letter to the Editor in the Gazette, where some guy complained that one of “our” employees recently got his pay increased by about $17,000. The letter’s question was, “In fiscally challenging times, why the increase?” Here’s a revelation; the problem is; nobody ever gets to the truth. And in this case, the truth is, “he took-on 2 jobs and by combining them the city’s overall payroll was cut by $50,000.” Here’s some simple advice to the weary – check the facts and get the truth, the whole truth and nothing but the truth. Then comment.
That typical misstatement leads to my observation that I believe the local conversation is not being properly couched. It seems that the city’s conversation has become “the citizens (us) vs. our employees (them)”. That conversation reminds me of the dysfunctional family at Thanksgiving. After 3 glasses of wine, everyone is more brilliant than each other and is certainly more able to solve the other’s problems better than they can. Look, the conversation we should be engaged in is, “the aggregate (the entire city, including everybody) vs. the global economy.” The question we should be asking is, “How can we partner & prosper?” And, by the way, I’d like to rebrand our “city employees” as “partners”. How can we (as partners) work together to efficiently provide the services we need to provide in a timely and cost efficient manner, and thereby improve our chances for productive economic development and growth in the context of the global economy?
And here’s couple of secrets I’ll share if you promise to keep them confidential – “we’re all on the same team” and “we’re all in this together”; and finally, let’s get our thinking straight and let’s recognize that 1) the city does produce stuff; 2) we do have customers; and 3) we are in business to earn profit. I’m just saying . . .
IT’S TIME.
PS: the commercial message – please call us if we can help you or any of your friends with property management (commercial or residential); or if you know anybody who is looking to buy or sell or who needs to lease any property (commercial or residential). They can call me directly at 719-337-9551 or they can contact RD at 719-630-2277.
Sincerely,
TJL
Tim Leigh
719-337-9551
Tim@HoffLeigh.com
