While the local economy is still strong, the commercial real estate sector is beginning to feel ripples from the recent economic slump and political events. Most area brokers say clients are hesitating to expand business and overhead. Most are bracing for at least six to twelve months of CBB (conservative business behavior).
According to the FDIC’s Survey of Real Estate Trends (July 2001), the national office/commercial market had begun to soften even prior to August, while single family housing and multifamily business performed better. From the Survey: ” … reports of excess supply increased in all markets, markedly so for the office market. It should be noted, however, that such reports were widely qualified as ‘some excess capacity’ rather than the more serious ‘excess inventory.’
Fortunately, Colorado has maintained a stable multifamily and industrial market through July while single family and office/commercial followed the national trends.
Retail leasing brokers, Chris Barnett and Bentley Hill of Sullivan Hayes Commercial say it may be the first of November before owners see any significant change in sales trends. “We were definitely busier this time last year,” Hill says, “but we’re still seeing good occupancy in our centers and no one is falling out yet.” Barnett concurs. “Of course retail is strongest in fourth quarter so we won’t really know things are going until November sales reports. Right now we’re in the best part of the year after three wonderful prior fourth quarter seasons. Contact me in 60 days and I’ll be able to give you a better read on the market,” he promised.
In other retail news, the Regency Centers, national owner, operator and developer of grocery-anchored shopping centers, has purchased Woodmen Plaza shopping center from M&KS Woodmen Development.
Local commercial real estate is still active. Stan Kensinger and Jim DiBiase of the Olive Real Estate Group hosted the monthly RCIS luncheon meeting at the new Aerospace Tech Center on Fountain Blvd. With 68,000 square feet, the building is oriented to a government contractor or technology company. The facility was designed for today’s user with high ceilings, upgraded heat and air conditioning, full-height glass, and seven watts of power per square foot. “We can also offer adjacent land for future expansion,” Kensinger notes. Aerospace Tech Center is owned by Integrated Properties out of Denver.
A planned 84-unit assisted living facility is in early construction stages on Arcturus Drive, just west of 8th Street. The facility is geared for care of Medicare patients and is owned by National Healthcare Associates out of Coral Gables, Florida. Hermann Spielkamp of Grubb & Ellis Quantum represented the seller and Jim Spittler of NAI Highland represented the buyer.
Steve Bach of Bach Commercial Real Estate just closed on the former Ent Federal Credit Union building at 807 N. Murray Blvd. With 42,446 total square feet of office space, the building is well-suited for a defense contractor or similar user. Twenty-seven hundred square feet of space will be leased back to EFCU for a customer service center and a detached operation center. “The good news right now,” Bach says, “is that anyone looking for office or commercial space will see all kinds of great opportunities to get excellent space at discounted rents. Any tenant looking for six months to a two or three year lease will get an excellent deal — especially with all the sub-lease space back on the market.”
In multifamily news, Doug Carter of Doug Carter, LLC Investment Real Estate Brokerage, announced the closing of Pebble Creek Apartments, located at 2005 South El Paso Avenue. The 47-unit apartment complex sold for $1,525,000. The sellers were a local partnership and were represented by Carter who has specialized in apartment sales and management since 1983.
Palmer McAllister has had a busy September with a number of new leases signed and properties sold. Kent Mau and Greg Phaneuf handled the listing and lease for 1,790 square feet for Weitz-Cohen Construction in the Tech Center VI Building. Useman and Greg Kaufman just secured a lease on 8,000 square feet for My Tumble Bus Gymnastics, Inc. as well as a 7,020 square foot lease at Ridgeview Plaza for Toof Industries. The partners were also fortunate to represent the seller on the sale of 5406-5408 North Academy Blvd. (a total of 11,904 square feet) last month. The property was sold to the Richard Sonntag Trust for $1,850,000.
Ted Link, a broker and real estate investor formed a partnership and purchased approximately 8.5 acres in Printer Park. The parcel consists of three lots and total purchase price was $965,000. According to Link, the seller was CFMH, LLC, a limited liability company run by David Phillips. He sees the move as a way to make a highly marketable investment for the future. “We can sell one or several parcels,” Link points out, “or we can develop buildings to lease or offer ‘build-to-suit’ opportunities at this soft economic time.”
From NAI Highland Commercial Group comes word of 2,346 square feet leased to Lockheed Martin. Lonnie Wagner represented the landlord and Jerry Knauf represented Lockheed Martin.
Steve Hunsinger, retail specialist with Palmer McAllister, negotiated the sale of 18,000 square feet of retail space at 6121 N. Academy Blvd. to A World of Tile. The seller was Aaron’s Rents, and the purchase price was $875,000.
ATTENTION READERS: The Colorado Springs Business Journal welcomes your news contributions to the Real Estate Column. Please submit news of your recent sales or leases by fax to (719) 634-5157. Deadline each week is Tuesday at 5:00 pm. for the following Friday’s newspaper.