New owner of former drug store fills space quickly

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New owner of former drug store fills space quickly

New owner of former drug store fills space quickly

Golden Properties LLC has purchased the former CVS/Longs Drugs store at 1730 Dublin Blvd. for $2.6 million.

Rich Walker of First Properties represented the buyer and Cory Dulberg of the Zall Co. in Denver represented the seller.

The 27,634-square-foot building will be occupied by Sunflower Farmers Market, which signed a 10-year lease and is scheduled to open May 27.

The long-term lease is somewhat unusual because mid-size retailers and grocery anchors typically buy their buildings.

Industrial updates

Extreme Bargains LLC has leased 20,000 square feet of warehouse/distribution space at 2850 North El Paso.

The facility will allow the retail distributor to unload up to 10 semi-trucks at a time.

“They buy lots (of products) that have expired or didn’t sell well from larger companies like Safeway or others – and then resell them to consumers at a much-discounted price,” said broker John Rodgers of Peak Commercial Property, who represented the landlord, 2850 North El Paso LLC. J.B. Isaac of Walker Commercial represented the tenant.

Rodgers also said that the local industrial market is frustrating investors who are used to leveraging their deals with a minimum down.

“It’s a cash world out there,” he said. “A lot of owners have been willing to go month-to-month on leases, just for the triple net (monthly utility and overhead expense). That’s what several companies along Garden of the Gods are doing.”

From the front lines

Occasionally, colorful observations about the state of the city’s commercial real estate scene make the week. Here’s one example from Tim Leigh of Hoff & Leigh:

“I have concluded that the office building for sale market is mostly made-up of ‘posers’ – that’s kid-slang for someone pretending to be someone else. Many of the current crop of sellers doesn’t seem serious enough to sell.

“From what published listing prices show, it’s apparent that mostly they’re ‘testing-the-water; they’re on a fishing expedition; they’re hoping someone will bring a bail-out; they’re looking for a stimulus’ … Cumulative listing prices tell me our market’s still living in fantasy land, where real estate prices never go down … Properties that get play and sell are priced mark-to-market; the ones that aren’t, don’t.

“And, in Colorado Springs, I consider the assessor, in most cases, to more accurately reflect true mark-to-market conditions than most of the current listing prices I see.

“We currently track 112 small office buildings for sale representing nearly 1.2 million square feet. Their collective average asking price is $121.88 per square foot. The tax assessor tracks those same buildings at his assessed market-value of $76.85 per square foot. There’s a price difference of $45.03 per square foot.

“On the basis of simple math, our market’s nearly $52 million over-priced.”

Projections scaled back

During the coming months, stimulus money will flow in increasing amounts, but that does not necessarily guarantee there won’t be a drop of as much as 9 percent in the nonresidential construction sector, said Ken Simonson, chief economist for the Associated General Contractors of America.

He described the construction industry as “often a lagging indicator of economic activity” and said that apparent increases in manufacturing construction were based on a few very large manufacturing or refinery projects begun well before the economic downturn.

“These large projects are eclipsing broader negative trends,” he wrote in a second quarter Data Digest report. ”

“Given declining office and hotel vacancy rates, continued difficult retail conditions and ongoing challenges with the credit markets, it is hard to imagine that many new office, hotel or retail projects will start anytime soon,” Simonson said. “And, unfortunately, even where there may be demand, financing these projects right now is, at best, difficult. In short, despite today’s data, nonresidential construction activity is likely to decline significantly over the coming months.”

Becky Hurley covers real estate for the Colorado Springs Business Journal.