Colorado Springs Real Estate Briefs October 18, 2002

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CSBJ readers are probably aware that residential interest rates on thirty-year fixed rate conventional mortgages have dropped as low as 5 and 7/8 percent. Hard to believe, but thankfully true. Christine Meacham at Auer Mortgage says these low rates may be around for a few weeks. Some national financial analysts predict that the post-election climate is likely to affect both interest rates and the stock market. In the meantime, anyone with a mortgage in the seven percent range might want to call their nearest lender.

Apartment Availability Increases, Rents Level

In his September Rent and Vacancy Survey, Doug Carter determined that the multi-family market continues to see increasing vacancy rates. It seems that older complexes (pre-1980s) are experiencing erosion in occupancy and rents, perhaps due to attractive deals offered in newer, moderately-priced communities – or due to current low interest rates that create opportunity for first-time homebuyers. Carter says that 55 percent of all apartments surveyed are offering rent or move-in incentives as in second quarter, but primarily for longer leases. The worst-hit area continues to be the city’s north side where the average vacancy is 12.5 percent, up from 9.7 percent last quarter in post-1990 apartment communities and higher than 10 percent in older properties to the north and near the airport.

Real Estate Investor Shares Successes

Craig Engelage, an investor in single-family lots, five commercial buildings and an occasional land deal, contacted the CSBJ regarding the sale of one of two Junior Achievement office facilities off Janitell Road. As part of a six-person partnership, Engelage says that he looks for projects in which the developer or builder may want to cash out and move on. He also recommends to those considering the purchase of a “little fixer upper” to proceed carefully. “You really have to do your due diligence and homework before buying a property. I’ve learned that even going to the Regional Building Department may not prevent sticker shock down the road. “They’re used to working with big builders who spend thousands everyday on construction,” he says. “For the little guy, replacing the wiring in an older home, for example, will run several thousand dollars and eat into your profits.” Engelage may be familiar to some local realtors as he bought 34 lots from the Schuck Corporation back in 1999 and sold out his inventory by the end of 2000.

Nor’Wood’s First and Main Town Center Business is Booming

In its fall 2002 Neighbor to Neighbor newsletter, Nor’Wood previewed plans for a community park just west of the existing theater complex at First and Main Town Center. The 1.5-acre site is slated to include sitting areas, public art, and entertainment or activity centers for the community’s use during the summer months. Nor’Wood vice president, Fred Vietch, says a development plan will be ready for city review by early November – and the park is slated to open in spring 2003.

First and Main Town Center appears to have reached critical mass with last week’s opening of the Super Target center on North Carefree. According to Vietch, all of the center’s major anchors have reported better-than-expected sales and traffic. “The new Target center was packed over opening weekend,” he said. “You couldn’t find a parking place. Lowe’s is doing close to $70 million annual at our location, and Galyan’s opened to 58 percent above projections.” Two new restaurants will be announced in the coming weeks, and Vietch plans to unveil seven or eight new retailers who will be opening in early 2003. Sounds like Nor’Wood Development’s careful planning and phased retail approach is paying impressive dividends.

When asked if he would be interested in another Uncle Wilbur at First and Main Town Center, Vietch jokingly said that he would welcome the popular children’s attraction and added that he’d be happy to have General Palmer on-site as well…

Million Dollar Sale for NAI Highland

Gary Bradley, listing broker, recently completed the transfer of four buildings totaling 21,150 square feet on 130,917 square feet of land to new owner, IAO Properties, Inc., a Colorado corporation and IAO Purchase Pension Plan and Profit Sharing Plan, a Colorado corporation. The properties are located at 1539 South Sable Boulevard in Aurora, Colorado; 1865 Dublin Boulevard and 2976 North Academy Blvd. in Colorado Springs; and 34 Montebello Road in Pueblo.

The facilities have been leased and occupied by Children’s World since construction. Headquartered in Golden, Colorado, the company has been operating early childhood and elementary educational programs since 1969. Says Bradley, “They currently own and operate nearly 600 community-based centers in 24 states.” The company is owned by ARAMARK, a $7 billion world leader in providing managed services, food and support services, uniform and career apparel and child care and early education programs – and is mostly privately-owned by its employee managers (93 percent).

Northpark Office/ Warehouse Facility Sold

The Equity Group’s Mientka represented the buyer, Pikes Peak Investment, LLP on the purchase of a 14,000-square-foot, two-story office building located at 4525 Northpark Drive. The building was purchased for $700,000, and financing was handled by First Country Bank in Blue Springs, Missouri. The Equity Group is affiliated with Pikes Peak Investment, and will provide future property management and leasing services for the building. Doug Wasson represented the seller in the transaction.