Powers Office Park in Colorado Springs adds to health care condo mix

With two hospitals scheduled to open within a few miles of each other in northeast Colorado Springs, developers have identified a number of prime sites for medical offices and commercial campuses.

But none may be more ambitious than the 11-building, two-phase, 340,000-square-foot medical and professional office condo complex scheduled to break ground this spring just south of the Powers Boulevard-Briargate Parkway intersection on Grand Cordera Parkway.

The 24.3-acre planned business center campus is owned by Harvey Salkow of Scottsdale, Ariz., who is lead partner in the Powers Group LLC. His background includes development of two office parks, a Westin hotel and a retail center in Scottsdale and Chandler, Ariz.

Described by listing broker and investor Bill Elder of Bennett Shellenberger as the medical community's first "truly Class A office condominium option," Powers Office Park will include several signature features - full concrete and steel beam construction, stucco and stone exteriors, upgraded security systems and a heated underground parking area for owners.

Each building also will feature two-story glass enclosed rotundas, providing natural light and views of the Front Range.

"Our condos will be 'warm gray shell' spaces with custom tenant finish opportunities," Elder said, adding that all mechanical systems, heating and cooling are included in the property's $205 to $230 per square foot cost.

Landscaping throughout phases one and two will be extensive, based on La Plata's higher-than-code requirements. As a result, the campus will feature a fully landscaped interior terminus and a fountain, creating an upscale corporate environment.

"Our landscape budget alone could approach $1 million or more," said Salkow who paid $6.5 million for the property he purchased from La Plata Investments (LP 47 LLC) last year.

Owner-user or investor mortgage financing is available, Salkow said.

"We're prepared to finance a $5 million building, for example, with 10 percent down or up to $13 million with 20 percent down," he said.

The Arizona developer expects to break ground as soon as City Council approves the resubmitted development plan.

Both Elder and Salkow said they feel some urgency to get the project started.

"Once approved, we'll begin construction," Salkow said. His hope is to get a jump on marketing to members of the medical community who are interested in locating within half a mile of Memorial North and 2 miles of St. Francis Healthcare Center.

Bryan Construction is the project's general contractor.

The first building will be a 24,000-square-foot three-level office structure, which is slated for completion later this year.

A second 31,000-square-foot building will break ground this year and is expected to be ready for occupancy by early 2008, Salkow said.

Three more buildings, including pad sites for a bank or commercial user are on the drawing board, with signage and access off North Powers Blvd.

"That configuration could change slightly, depending on what our users require," Elder said.

Ultimately Salkow expects the two-phase project to exceed $75 million in total investment "depending on the national as well as local investors we attract."

Powers Office Park's size and infrastructure represents competition for the 55,000-square-foot Promontory at Briargate office condo campus off Research Parkway, which is scheduled to break ground this spring, as well as for the 70,000-square-foot Courtyards at Briargate office condos.

Based on the near-sellout of 36,000 square feet of office space in Research Professional Buildings I and II at Research Parkway and Scarborough Drive, and the recent sale of one of the Tutt Professional Business Park buildings - all in the fast-growing northeast - investors and owner-users are fueling an energized professional condo market.

And that doesn't include upcoming condo conversions such as the one way at Pine Creek Village by Sunshine Development.

Because there is so much product to choose from, both Elder and Mark Dyer of Grubb & Ellis Quantum said prospective condo buyers need to identify exactly what they're getting for the quoted price.

"In some developments, certain tenant finish components are extra," Elder said.

Dyer, marketing broker for the Promontory at Briargate project, agreed. He said that several proposed office condo conversion projects have air conditioning systems, for example, that were built to residential rather than Class A commercial standards.

"It is very important for buyers to find out exactly what is provided for at the owner's per-square-foot-price and what is not," he said.

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