Hoff & Leigh is expanding its commercial real estate business with a business focus that will range from the heart of Colorado Springs to out-of-state business prospects.
The Colorado Springs commercial real estate company is franchising outside the state and has merged the property management arm of its business with The O’Neil Group. O’Neil, run by CEO Kevin O’Neil, owns several commercial properties and technology companies, including Braxton Technologies, which recently moved into the former Chase bank building at 6 N. Tejon St.
The franchise plans are part of Hoff & Leigh’s vision to expand into other tertiary markets underserved by large commercial brokerages. First on the franchise list is Castle Rock, followed by Tucson.
The property management merger with O’Neil, which will be called The Paramount Group, will provide a foray for Hoff & Leigh into the Class-A market.
The Paramount Group also purports to have several downtown projects slated.
Holly Trinidad, a partner at Hoff & Leigh and daughter of company founder and City Councilman Tim Leigh, said Paramount has plans to renovate the ground floor at 6 N. Tejon.
Plans include giant windows and retail space.
Trinidad said a coffee shop is planned in the lobby and that the space would be divided up and leased to small business that range from mortgage companies to clothing shops.
“It will be a good tenant mix,” Trinidad said. “It should be really good for downtown.”
The merger has also meant more opportunity for Hoff & Leigh.
“We practically tripled our book of business,” she said. “Kevin owns a lot of properties.”
The merger allowed O’Neil to acquire a property management solution complete with all of the systems and staff, while at the same time growing Hoff & Leigh’s business, Trinidad said.
It also gave Hoff & Leigh a chance to rebrand its property management business. Management was never a large part of the firm’s portfolio and it primarily took care of B- and C-class properties with lower rental rates.
She said part of Hoff & Leigh’s connection with the O’Neil Group had to do with a shared vision for developing Colorado Springs from the “heart out.”
Trinidad returned home to Colorado Springs to work with Hoff & Leigh after several years of working in the Los Angeles film industry about five years ago.
That’s when Hoff & Leigh principles started planning to franchise and open offices in other cities around the country. They even got started with a new office in Akron, Ohio in 2008 before the market went soft.
But plans for expansion were on the backburner through the recession, Trinidad said. Now that there are some signs of improvement in the market, the firm is gearing up to grow.
Hoff & Leigh will open a new office in Castle Rock next month and one in Tucson, Ariz. in April, the first big moves toward franchising nationally since the Akron office opened four years ago.
“We’ve been working on this for a long time,” Trinidad said. “In secondary and tertiary markets like Colorado Springs there aren’t any really big brokers. Most of them are local. We want to create that presence in those markets.”
The idea is to move into underserved cities with the full backing of Hoff & Leigh resources, she said.
“We have a really scalable model,” Trinidad said. “So, why not do it?”
The company hired Jason Baumgartner as a research analyst last year to examine tertiary markets around the country and compare them. He’s been compiling data for a year and Hoff & Leigh has been waiting for the right time to expand into these other markets.
Castle Rock and Tucson are just the first of several likely franchise offices, Trinidad said. They are first because there are trusted colleagues staged and ready to open Hoff & Leigh franchises.
Bob Hoff, one of the firm’s founding members, sold his share in the company several years ago and has since semi-retired in Arizona, Trinidad said. He is opening the Tucson office.
Todd Ogden, one of Hoff & Leigh’s commercial brokers who lives in Monument and has been doing a lot of work north of the city will be opening the Castle Rock office.
“They need the services of commercial brokers there,” Ogden said. “There are a lot of residential agents, but there aren’t a ton of commercial brokers.”
He said there are just a few Realtors who do work with commercial real estate and most of them also work with residential or also work in Denver.
“Most of the commercial owners tend to do a lot of their own marketing,” Ogden said. “They list their leases or sales by owner.”
And that’s fine, but there’s also a lot of movement in the market and prices are significantly higher in Castle Rock than they are in Colorado Springs — about 20 or 30 percent higher, Ogden said. It’s a lot for owners to handle and it’s a great financial opportunity for Hoff & Leigh.
“There’s a lot of money up there and no brokers,” Trinidad said.
Ogden initially thought he would take a year or more before opening an office, but the reception has been so good and he’s gotten enough feedback from commercial owners that he felt confident moving forward with the franchise now.
He only has one listing in Castle Rock and he expects it to go under contract this week. But he’s confident that having a physical presence in the market and developing expertise and a reputation there will drive business. Eventually he expects to have two agents dedicated to Castle Rock and one or two others to deal with properties in Parker and the southern Denver suburbs.
“Up until now Castle Rock has been more of a bedroom community for south Denver,” Ogden said. “And now we’re seeing some more commercial come in to support those residents.”