Investors getting back into the game as market turns

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Investors chasing a good deal at or near market-bottom have begun to make their move in the Pikes Peak region.

The Christian Bookseller’s Association’s 42,470-square-foot building on five acres just sold to a Colorado Springs investor for $3.6 million, more than the property’s $3.3 million assessed value. The buyer, 9240 DTC LLC, is a local investor, said Grubb & Ellis Quantum Commercial Group listing broker Susan Beitle. John Onstott of NAI Highland Commercial Group represented the buyer.

CBA will continue to occupy about 4,200 square feet in the building, as will Children’s Hope Chest.

“They’re (CBA) an umbrella organization for a number of Christian book sellers throughout the country — and in view of the way the book industry has changed, thanks to iPods and downloads, they’ve adapted,” she said.

The sale represented the first multimillion-dollar Class A office building sale during the past two years in the Briargate area. Beitle said the facility’s hillside location, overlooking a golf course and the Front Range panorama, as well as its upscale interior finishes and design, helped make the sale.

The Christian Bookseller’s Association building just sold for $3.6 million. The 42,000-square-foot building sits on five acres.

The Christian Bookseller’s Association building just sold for $3.6 million. The 42,000-square-foot building sits on five acres.

Other prospective tenants are also lining up — and at least one is a large medical user.

News of the CBA sale follows last week’s $2 million Centennial medical office building purchase by a Denver-based medical group.

Another smaller 2,500-square-foot office condominium at 16055 Old Forest Point in Jackson Creek also just sold for $494,172 to Walsh Holdings LLC. The new owner will use the space for a dental practice. Grubb & Ellis Quantum Commercial Group brokers Andrew Oyler and Susan Beitle represented the seller, Elkton Condo Partners Inc., while Mark Useman of Sierra Commercial Real Estate represented the buyer.

While it’s probably too early to draw conclusions about the overall commercial market, two large office building sales and some smaller acquisitions seem to demonstrate that the market may be turning.

In his December fourth-quarter Commercial Availability Report, Paul Turner of Turner Commercial Research said only 18 office properties totaling 201,295 square feet had sold to investors during 2009 for just over $25 million.

So far this year, at least three buildings totaling more than 56,000 square feet have already sold for more $5.5 million. Based on these early results, 2010 may begin to see a thaw in the near-frozen office market.

Industrial leases advance

The industrial leasing market is springing to life as well.

Wal-Mart just signed an 80,000-square-foot lease at 3650 N. Nevada for use during a long-term project that will involve equipment storage during the remodel of its Colorado Springs retail stores.

The landlord is the University of Colorado Foundation.

John Rodgers of Peak Commercial Properties and Gary Hollenbeck of Palmer McCallister Cushman Wakefield represented the owner, and Alec Rhodes of Fuller Real Estate represented the tenant.

In related news, Rodgers also represented owner WKB LLC in the lease of almost 30,000 square feet in two warehouse buildings at 3270 Astrozon Blvd. The new tenant, SRS Acquisition Corp. — a roofing supplier — was represented by Grubb & Ellis Quantum Commercial Group’s Rich Kelly.

A 5,000-square-foot neighboring property at 3410 Astrozon Court also leased to MCDP LLC, a solar research and development firm. Andrew Madden of Grubb & Ellis Quantum Commercial Group represented both the landlord, Dobry Pritel Inc. and the tenant.

Reinventing Macy’s

Bach Real Estate Partners brokers Steve Bach and Mike Helwege are actively marketing their newest listing: the former Macy’s building at 755 Citadel Drive.

So how does a broker market a one-time 185,000-square-foot department store with escalators and windowless exterior walls for alternative use?

“Macy’s approached us — and knew we weren’t retail specialists. But they’d heard how we’d found adaptive uses for large floor plates — like when we helped the James Irwin Charter Academy buy a former industrial building,” Bach said.

Selling points included the fact that the building’s large spaces can be easily reconfigured, post-and-beam construction allows for as many doors and windows as needed and the property is located on a bus line.

Bach said he had “about six conversations going on.” And all current prospects would bring new jobs and new shoppers to the mall.

“We’ve had a discount retailer, some nonprofit organizations and pure office users — even defense contractors express interest,” he said.

Becky Hurley can be reached at becky.hurley@csbj.com or 719-329-5235.