Gas Operations building remodel progressing at fever pitch

Filed under: real estate column |

Kurt Kaltenbacher said the Gas Ops renovation should be completed by February.

The former Gas Operations building next to America the Beautiful Park has become a beehive of activity since LandCo Equity Partners pulled the trigger on the 32,000-square-foot project last month.
Kurt Kaltenbacher, owner of Copestone Construction Co., said that more than a dozen subcontractors have assigned 40 to 50 people a day to work on the interior remodel.
As many as six sports national governing bodies are expected to move into the former industrial building next February.
RNL Design of Denver has handled interior layout and design.
The exterior will remain as is for now, but inside steelwork to support new office walls, a heating and air conditioning system and open common areas is going up.
Kaltenbacher estimated the project will include about $2.1 million in improvements. Parking, just to the north, will be secured by electronic gates and fresh landscaping will be added.
“Because the budget is tight, we’re doing lots of value engineering,” Kaltenbacher said, adding that his firm also will bid on future jobs at the Olympic Training Center. The new building will include offices for USA Badminton, USA Tennis and others.

Stratton Pointe picking up

“Work on Stratton Pointe is definitely under way, and we’re still expecting to have the building ready to open next summer for a USOC move in as planned,” said Jim Brodie, president of LandCo last week.
While demolition and asbestos remediation have taken several weeks longer than expected, Baldwin Demolition should be finished by year-end, he said.
G.E. Johnson Construction will then erect four additional stories to the existing building during the first quarter of 2009.
“We started about a month ago, even as Baldwin is finishing up, to help keep things on schedule said,” said President Jim Johnson.
Financing commitments for the $53 million USOC package, including Stratton Pointe, remain intact, Brodie said, despite recent uncertainty on Wall Street.

Construction forecast

While general contractors like Copestone and G.E. Johnson Construction might be forced to “sharpen their pencils” to remain competitive, the non-residential construction sector is likely to remain more stable than its residential and non-building construction counterparts.
“I worry about keeping our 34 employees busy, not so much this year, but in 2009 and 2010,” Copestone’s Kaltenbacher said. “We’re willing to do everything from a $25,000 tenant finish to a $5 million ground up job. I want to keep my crews busy. So far this year has been fine. We’re off maybe 10 percent compared to last year, but I’m concerned about the future.”
The chart above shows what the experts are predicting for construction spending in the United States for the next two years.

Industrial sale

John H. Dammann has purchased an industrial building at 1125 Calvert St. for $245,000 from the Marga E. Nelsen Trust.
Rich Kelly of Grubb & Ellis Quantum Commercial Group represented the buyer and the seller.

‘Negative equity’

The First American CoreLogic Negative Equity Report, released through Sept. 30, provided “negative equity” estimates for all single-family residential properties in the United States.
The findings encompassed nearly 42 million properties that have a first and/or second mortgage — or more than 80 percent of all mortgages in the United States.
The inaugural survey’s results provided some eye-opening statistics:
More than 7.5 million mortgages or 18 percent of all properties with a mortgage were in a negative equity territory. An additional 2.1 million mortgages, defined as being within 5 percent of negative equity, are approaching the same dangerous territory.
The two “at or near” negative equity categories accounted for more than 23 percent of all mortgaged properties.
Colorado didn’t make the list of states with the highest negative equity borrowers. Nevada and Michigan showed the highest percentages with 48 percent and 39 percent, respectively.
Other states with negative equity rates of 20 percent or higher included: Florida, Arizona, California, Georgia and Ohio.
Excluding the top six states, the remaining states’ average negative equity is 12 percent, well below the national average. New York came in lowest, followed by Hawaii, Pennsylvania and Montana.
First American CoreLogic analysts attribute the variation in negative equity rates to that fact that states experiencing a rapid housing-price boom and speculative investing are now seeing rapid price depreciation.
Others have suffered from manufacturing-driven economic stagnation and the third group — mostly Southern states — didn’t see a large housing boom, but have higher negative equity.
Becky Hurley covers real estate for the Colorado Springs Business Journal.