Foreign buyers expected to stay busy next 2-3 yrs.

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Last week’s news that the HRPT real estate investment trust represented a foreign buyer in the purchase of a 75,000-square-foot building on Campus Drive was unusual for several reasons.

One of the most interesting was that the Pikes Peak region, a secondary market, had attracted capital from outside the country.

In a recent Commercial Investment Real Estate magazine story titled “International Influx,” industry experts explained why European, Middle Eastern and Asian investors with cash are shopping beyond major metropolitan markets like New York, Los Angeles and Chicago.

Their perspective: Some German, Dutch, Israeli as well as Canadian, Japanese and Chinese investors held off buying from 2004 to 2007, when the market was at its peak. Today, however, the decline in commercial real estate prices and the constraints on available capital to finance or refinance have created capital-appreciation opportunities for foreign investors to buy U.S. real estate.

Thanks to current U.S. market dynamics, sharp foreign investors will be able to make investments in good properties at a greatly reduced cost basis — and often well below replacement cost. Most will remain low-key, working through large commercial investment funds or real estate investment trusts, said Jones Lang Lasalle broker Amber Strang.

So, what’s the window of opportunity on this action?

Commercial Real Estate thinks the next two or three years will be key.

The good news, of course, is that the bottom in this segment could finally be here.

“This wave of investment will have the beneficial effect of helping depressed U.S. real estate markets find and define the bottom of the current cycle and help lead to an eventual recovery,” the article said.

Deal flow on the rise

Need further evidence that the worst of the recession is now behind us? Consider the dozen or so deals that have closed during the past few weeks in the Pikes Peak region:

There was big industrial leasing news from NAI Highland Commercial Group’s Randy Dowis and Paul Engel. The brokers represented landlord Bill Mackey on a 28,800-square-foot lease at 2520 Aviation Way in the Airport Business Center. The new tenant is K&H Manufacturing, a locally owned pet bedding company that specializes in comfy, heated sleeping quarters for Fluffy and Fido. Andrew Madden of The Masters Real Estate Group represented the business owners in their relocation from smaller quarters.

Mosaic Inc., a local nonprofit, leased 11,285 square feet of office space at 888 Garden of the Gods Road in the Impact Building. The new tenant is relocating to expanded facilities and was represented by Charlie Madsen of Keller Williams Commercial Real Estate Partners. The landlord, Impact Investments Colorado, was represented by Ryan Higgins and Frank Tuck of NAI Highland Commercial Group.

Another big lease was signed by Technical Trades Institute’s Intellitec College at 2504 E. Pikes Peak Avenue. In expansion mode, the school now controls about 15,000 square feet of storefront office/retail space near the Pikes Peak Workforce Center. Julie Philips and Lee Kilbourn of Fountain Colony and Centennial Services represented the landlord, Kospeak LLC. John Onstott of NAI Highland Commercial Group represented the tenant.

Adesa Inc. has sold 6.49 acres and a 6,300-square-foot industrial building at 500 Willow Springs Road in Fountain for $900,000 to FirstFleet Inc. of Murfreesboro, Tenn. Amber Strang of Jones Lang Lasalle represented the seller, and Mike Shriver with Colliers B&K in Denver represented the buyer. First Fleet operates as a private contract trucking hauler.

Dr. Ronald Thoman has purchased a 4,570-square-foot medical office condominium for his oral surgery practice for $140 per square foot, or about $639,800. The property at 8580 Scarborough Drive is owned by a local investor, Research Two LLC. Cascade Commercial Group broker Ted Link represented the new tenant and said the building is now 89-percent occupied by owners and leasing tenants. Brian Wagner of Sierra Commercial Properties represented the landlord, Research Two LLC.

In addition to new leases, two retail landlords also saw significant renewals.

Iron Mountain (Carpet) has renewed its lease at 1385 Quail Lake Loop from landlord Kumiva Group LLC out of Los Angeles for three years. Amber Strang of Jones Lang Lasalle represented the tenant.

Best of Ballroom continues to keep ‘em dancing. The dance studio just renewed its 3,600-square-foot lease at 5649 N. Academy Blvd. in the Erindale Center. Broker Robert Aertker of Landmark Commercial Group represented the landlord, north Academy Home Center LLC. Marty Johnson of CB Richard Ellis represented the tenant.

Becky Hurley can be reached at 329-5235 or at becky.hurley@csbj.com. Friend her on Facebook.