Colorado Springs Real Estate Transactions – July 8, 2002

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Those that attended the June 19 RCIS luncheon were treated to not one, but two high quality presenters. Colorado Springs-based sports psychologist and counselor, Dr. Gayle Davis, described how to hang tough through an uncertain market, and explained how to avoid negative “self-talk” (not that any of us ever experience the temptation…).
David Seamon, EDC’s new executive vice president and chief marketing officer, also took a few minutes to outline his game plan for attracting new business to the Pikes Peak region. Accepting his new position just months after September 11 and in the face of a bear market, Seamon appears fearless in the face of the unknown (a former Marine). He’s a realist, pointing to the globalization of manufacturing and the flight of capital across national boundaries as issues our community must face. Remember losing Quantum and RockShox manufacturing business to China and Malaysia? He extended an invitation to the commercial real estate community to work closely with EDC to generate prospects. One concept I especially liked: approach companies Colorado Springs would like to “invite” to be part of our business community — very proactive.

Palmer McAllister Releases 2nd Quarter Commercial Real Estate Analysis
Palmer McAllister’s research team says that average Class A office/commercial asking rates of $13.41 per square foot are the norm — in spite of an overall lease rate average of $12.29 per square foot. That is really the good news in view of continued negative absorption rates and 16.6 percent vacancy rates (including existing buildings, new construction and sub-lease space). Highest vacancy rates can be found on the city’s East (15.5 percent), Southwest (12.9 percent) and Northeast (12 percent) sectors. According to the quarterly report issued on June 24, “Landlords continue to aggressively pursue potential tenants by offering competitive rates and other incentives, such as free rent and lease buyouts.”
In industrial space, the update indicates a small increase in available space over first quarter (1.9 percent). In this area, the northeast, east and northwest parts of town (including the Interquest, Briargate and Garden of the Gods corridors) are suffering with 10 percent or greater vacancy rates. Strong markets on the city’s westside, central business district and in the southeast quadrant are helping balance the wavering industrial market. One interesting note: Overall lease rates are remaining steady at $8.25 per square foot. Vacancy rates may shift in third quarter as two new buildings totaling 106,000 square feet reach completion, according to PM’s experts.
Finally, on the retail front, the news is better. The long-underserved east and southeast areas of town have absorbed more than 80,000 square feet of retail space, although the abundance of new construction and existing retail space on South Academy has bumped vacancy rates to more than 15 percent in the southeast. Vacancies remain under 7 percent in most parts of the city. The report notes that a number of new stores such as Galyean’s, a new Target Superstore and numerous small pads under construction make Powers Boulevard “the place to be” for retail in 2nd Quarter.

Multifamily Report Sees Fewer Rent Concessions, Vacancies Down
What a difference $31 can make — especially when it represents a drop in average monthly rents (among post-1990s properties) from $860 to $829. As a result of last Spring’s rent concessions, Doug Carter, Pikes Peak region apartment/multifamily expert, says vacancies in newer complexes (many on the city’s north side) dropped from 17.8 percent to 9.7 percent. That’s a 54 percent decrease.
In the report, released on June 21, Carter also said that 1980s vintage communities actually saw a 14 percent jump in rents along with a drop in vacancies from 7.5 percent to 6.2 percent. He also found that communities offering rent concessions dropped 11 percent. It will be interesting to see if the multifamily properties listed by Doug Carter, LLC on Austin Bluffs, or the two properties listed by Grubb and Ellis near Peterson AFB, go under contract, based on news of a stabilizing market. The report must also be encouraging to Griffis-Blessing and Bishop Powers, Ltd., developers and managers of the new 328-unit Creekside Apartments at Powers Blvd. between Palmer Park and Galley.

Jason Madsen Joins Kevin Kratt Commercial Real Estate
From opening three local Jamba Juice stores to getting a Colorado broker’s license, 27 year old Jason Madsen loves a good challenge. On April 1, 2002, he sold all three stores and prepared for the next adventure. Once Madsen obtained his broker’s license over the holidays, he talked to his former landlord, advisor and mentor, Kevin Kratt — and struck a deal. The rest is history.
The new broker is already working on leasing two listings: one at Woodmen and Academy and the other at Rockrimmon and Vindicator. Both centers are anchored by major grocery stores and Madsen says he has two in-line spots open at Woodmen and Academy and two at the Rockrimmon center where he says there is tremendous demand for an upscale daycare center. Sounds like he is well on his way to a building a second successful career.

Office/Commercial and Industrial Deals
Last week the CSBJ reported Integral Systems’s lease of 22,546 square feet — with Coldwell Banker Commercial’s Candy Seaton representing the tenant. What you may not have known is that the lease was negotiated with General Dynamics who held the master lease (represented by Randy Dowis and Bob Garner of NAI Highland Commercial on the transaction). A military contracting firm, Integral Systems designs and builds ground-based satellite systems.
In other office/commercial news, Coldwell Banker’s Buddy Rutherford facilitated the sale of a 3,500-square-foot building at 330 North Institute. New owner, Burry & Amos Architects, paid $149,900 for the facility.
Innerwall, Inc. leased 6,571 square feet of office space at 4945 North 39th St. Bob Nolette represented the landlord.
CTX Mortgage leased 2,531 square feet of office space at 5390 North Academy. Dan Cathcart and Bob Nolette of Coldwell Banker Commercial represented the tenant. The Cathcart-Nolette team also represented the landlord, on a 950-square-foot lease to Magellan Behavioral Healthcare at 5520 Tech Center Dr. in the SMI Building. Greg Phaneuf of Palmer McAllister represented the tenant.
Clint Darnell and Jay Carlson, both of Coldwell Banker, represented the seller, USTOR Spring Creek, LLC, on the sale of 1.43 acres of land at 2280 South Circle Dr. for $280,308. The buyer was Susanne Arens, represented by Jody Sitkowski.

Retail/Hospitality/Land
Transactions
Jay Carlson has been a busy listing broker, completing three retail leases at Citadel Shopping Center. New to the Center are: The Guitar Center, leasing 8,600 square feet at 537 North Academy Blvd.; Coldstone Creamery at 765 North Academy Blvd., which leased 1,350 square feet and Mr. Neat’s Tux Shop at 767 North Academy Blvd. which leased 1,809 square feet.
Buddy Rutherford also sold the 60-room Holiday Inn Express in Canon City for $2.65 million to Tanveer Khan. Rutherford represented the buyer and the seller in the transaction.
Bob Cope of Coldwell Banker Commercial represented the landlord on the lease of 2,400 square feet of retail space to Leisure Time Hot Tub, LLC in the Dublin Square Shopping Center at 6480 North Academy Blvd. The tenant was represented by Wayne Curtis of ReMax Associates.
Finally, in an out-of-town land sale, Mark Hinton of Coldwell Banker Commercial represented the buyer, B.A., Inc. and the seller, Alexander McCulloch. Sales price for the 88.27-acre parcel (a portion of the McCulloch Ranch near Canon City) was $167, 713.
Correction
The upcoming American Institute of Building Designers (AIBD) conference to be held at The Broadmoor on July 3-7 says that the event is a national rather than a statewide event. Larry Gilland, president-elect of the Colorado chapter of AIBD, is a licensed professional
building designer.