Word was out this week about what could be one of the bigger commercial real estate deals in Colorado Springs so far this year. It hasn’t closed yet, but Blake Allen of Manitou Springs-based Allen Realty has agreed to buy the 185,000-square-foot space that was formerly a Macy’s department store at the Citadel Mall.
The building has been empty for more than two years. Now Allen hopes to bring an anchor tenant to the top floor and dice up the bottom half among smaller retailers.
While Allen isn’t getting specific on the costs, the challenge will be in successfully financing the purchase.
“(Financing for) commercial real estate is a train wreck right now,” said Hoff & Leigh principal Tim Leigh. “Where do you get the dough for something like that? Making an offer is one thing, closing it is something else.”
But Allen has a plan.
He’s president of the Colorado Creative Marketing Exchange, and said he’s using skills learned from that and another trade association, the Pike’s Peak Exchangors, to drum up capital for the project.
The Exchangors are a group of real estate professionals who look for opportunities to trade cash or property for an equity stake in a venture. In this case, Allen is looking to swap equity in the investment for a free and clear piece of real estate.
“I’m basically creating a large note against the mall and taking in equities in exchange for a piece of that note,” Allen said. “If you have a free and clear house that you can’t sell right now, I can take that house and give you some percentage of the note. It’s a share of the note secured by the opportunity (of returns on the mall).”
Allen is optimistic about the future.
“It’s an unbelievable value and for the price I’m getting, this was too good to pass up,” he said. “We’re basically adding 193,000 square feet to Citadel Mall without having to build anything.”
Colorado Landmark Hotels’ planned $15 million, 74-room expansion of the Cliff House onto Park Avenue in downtown Manitou Springs is moving forward following the new life given the project by the City Council earlier this year.
The company originally won approval for the project back in November 2009 — and then, strangely, neglected to sign the city’s paperwork within the 30 day window.
This time around CLH has again convinced the City Council of the economic impact the project will have. But now the Council has requested a study on the impact of what that expansion could mean for the already congested downtown.
“This study will help determine its impact on traffic during peak summer season,” said Colorado Landmark Hotels Vice President Dan Dick. “A traffic study was part of the original plan approved by City Council in January, but Council asked for a study based on summertime traffic before issuing a building permit.”
The company has hired LSC Transportation Consultants, which specializes in transportation planning for the region. Dick said the study will include analysis from city and hotel staff and citizen input from recent public hearings.
“We use data … to estimate how many vehicle trips a hotel of a given size will generate in any given hour,” said LSC engineer Jeffrey Hodson. “Based on those calculations, we estimate there will only be about 64 additional cars in town during the peak hour on Saturdays, even when all of the new rooms at Cliff House West are full. The car count could be even lower because many guests will walk to nearby shops and restaurants.”
Still, the biggest challenge for the proposed expansion may lie ahead: There are documents that will need to be signed.
Jonathan Easley can be reached at firstname.lastname@example.org or 719-329-5235. Friend him on Facebook, find him on Twitter and follow his blog at www.csbj.com/realestate/