Apartment Realty Advisors represented the Dermot Co. in the sale of the Commons at Briargate to RK Properties in October. The apartment complex, built in 1996, has 194 units, each with a private garage. “It’s one of the few properties in town that has direct access garages,” said Ken Greene, vice president of Apartment Realty advisors. “Only a couple properties in the city were built that way,” added Jeff Hawks, principal for ARA, in a news release.
“It’s in the high growth area in the northeast corridor. The location is very strong.” The property is located at the southwest corner of Research Pkwy and Lexington Drive.
“This was a great buy for RK Properties,” said Doug Andrews, principal with ARA in a news release. “The price was well below replacement cost and you can’t beat the location.” Each unit comes equipped with a washer and dryer, cable television and the resources for high-speed internet access. Twenty percent of units have one bedroom, 60 percent are two-bedroom units and the remaining 20 percent feature three bedrooms and about 1,330 square feet of space, Greene said. Commons at Briargate residents have access to Wedgewood Park, a heated outdoor swimming pool, hot tub, 24 hour fitness center and a private clubhouse.
As of October 14, Apartment Realty Advisors had sold $270 million in apartment properties in Colorado in 2004. In the last five years ARA has sold more than $1.5 billion in apartment properties in Colorado. “We’ve sold more properties down here (in the city) than anybody,” Greene said. “It’s kind of a relationship business. A lot of our business is with regular customers.” Apartment Realty advisors also represented Dermot in the sale of Champions at Norwood. Champions and the Commons at Briargate were the only properties owned by Dermot in Colorado. Dermot, which is based in New York, decided the Colorado market was too far away, Greene said.
According to Apartment Realty Advisors, their national partnership of multi-investment sales leaders was formed to serve the multi-housing industry. The partnership is made up of eight firms in Denver, Charlotte, N.C., Dayton, Ohio, Atlanta, Boca Raton, Burlington, Mass., Houston and Dallas.
Classic Companies forms Classic Capital Group, LLC
Businesses looking to grow may now approach a new growth capital provider in Colorado Springs. Classic Companies has launched Classic Capital Group, which will focus on opportunities along the Front Range and in El Paso County.
Tim Coutts, former president of the North American division of FRIWO GmbH, an international electronics manufacturer, was hired as the managing member of the capital group. “I suppose we talked off and on for about three or four months,” Coutts said. “I’ve known some of the Classic owners for some time.”
Coutts said he and Classic Capital have seen their fair share of interest from companies in town. “We’ve been approached already by some folks with business plans and investment opportunities,” he said. Classic Capital will operate independently of what Coutts called the “core businesses of Classic,” including mortgage and building services.
“We believe growth capital is an essential ingredient in a vibrant local economy,” said Doug Stimple, CEO of Classic Companies in a news release. Only companies in search of capital for restructuring endeavors, funding for transition from parent companies or those companies looking to fund growth projects will be considered by Classic Capital. The group will not fund early stage firms seeking venture capital.
And Classic Capital will not single out specific sectors when considering which projects to fund, Coutts said. “We don’t have a specific type or range of investments we focus on,” he said. “We may find later on that we will start to specialize, but right now we’re not drawing any barriers.”
Coutts is optimistic about the impact Classic Capital will have on the area. “I hope that we have a positive effect on the local economy,” he said. “We hope that we help generate employment opportunities here in El Paso County.” Coutts said he also hopes the presence of Classic Capital in the community will increase awareness about growth capital opportunities. “This type of capital hasn’t been readily available or readily known about.”
Home sales expected to remain strong through 2004
On October 28, Freddie Mac released the results of its Primary Mortgage Market survey. According to survey results, the 30-year fixed-rate mortgage averaged 5.64 percent in the southwest region (which includes Colorado) with an average 0.7 points. This represents a decrease from the 5.69 percent average from the previous week.
Nationwide, the average for the 15-year fixed-rate mortgage was 5.01 percent last week with an average 0.8 point. In the southwest region, 15-year FRM averaged 5.08 percent with a 0.6 point.
“Home sales are very sensitive to mortgage rates,” said Frank Nothaft, chief economist for Freddie Mac in a news release. “Low mortgage rates drove the uptick in sales during September. And with mortgage rates at their lowest level in six months, home sales should continue strong through the autumn months.”
Freddie Mac is a stock-holder owned corporation created to provide continuous funding to mortgage lenders. The corporation was established by Congress in 1970. According to Freddie Mac, one in six homebuyers in the United States receives assistance from the corporation.
Classic Mortgage COO and president receive awards
The Colorado Mortgage Lenders Association awarded Roger Cavender, Classic Mortgage president, and Gene Mills, Classic Mortgage chief operating officer, the Entrepreneur of the Year award. Mills and Cavender have each served as first officer of the Southern Colorado chapter of the association.
Classic Mortgage is often ranked as the No. 1 new home lender in Colorado Springs and the No. 1 purchase money lender of government loans. Classic also is frequently ranked among the top three total purchase money lenders in Colorado Springs.
Third quarter market highlights
Within the office commercial real estate market the current vacancy rate is 9.7 percent in Colorado Springs according to Bach Commercial Brokerage. The real vacancy rate is 10.5 percent when the more than 195,000 square feet of sublease space are added. As of October, 67 office properties had been sold for an average of $101.40 per square foot. The average for 2003 stood at $88.63 per square foot.
The industrial market has a vacancy rate of 11.4 percent. The cost of rent within the industrial sector has increased by 1.2 percent during the first three quarters of 2004.
Thirty-nine industrial buildings were sold in Colorado Springs through September at an average of $47.37 per square foot.
National home sales and economic growth
According to the Meyers Housing Market Key Indicator alert dated October 29, new and existing home sales were up by more than three percent as compared to sales in the previous month.
The economy grew at a rate of 3.7 percent during the third quarter according to the key indicator alert. This rate was below the rate expected by analysts, but stronger than the 3.3 percent rate of the second quarter. Growth in the fourth quarter is expected to increase.
In September, new home sales saw an increase of 3.5 percent nationwide. New home sales one year ago were seven percent lower than today’s rate.