Colorado Springs Real Estate Briefs: September 7, 2007

From Sierra Commercial Group comes word that the second quarter of 2007 showed "healthy" results, although the city experienced 20,404 square feet of negative absorption.

Broker Nichola Myers-Murty said "considerable movement among tenants in the financial sector," meaning hard-hit mortgage companies and home builders, precipitated a shift for some companies from Class A properties to "better Class B" properties along the Front Range.

She also said that many tenants who signed leases earlier several years ago, when vacancies where higher, benefited from discounted rates for Class A space. As a result, landlords and owners of top buildings are able to command higher lease rates when those tenants renegotiate their leases.

Some smart investors are buying Class B buildings and improving them. That makes sense as tenants begin to become more price- sensitive and seek new options.

Story in mortgage rates: big lenders cautious

Are consumers ready to go house-hunting and take advantage of soft sales prices? Inman News reporter Ilyce Glink took a look at how some mortgage lenders are controlling access to 30-year, fixed- rate mortgage money by pricing themselves above the competition.

On Bankrate.com, for example, she points out that even though the average rate is quoted at 6.25 percent or lower, some lenders don't really want to participate.

"You can really see who doesn't want to play by checking out the loan offerings at Bankrate.com," she said. "Bank of America was offering just over 7 percent and Countrywide is at 7.1 percent. That's one way to discourage business."

At the same time, borrowers shopping for new or refinanced jumbo loans (amounts more than $417,000) are seeing rate quotes ranging from 8 percent to 13 percent. She attributed the tightening money market to a reaction to a national liquidity crisis, which came on quickly and "could take months to unravel."

Lake Plaza Office Condos under way

Demolition will begin next week at an office building on 1.8 acres at 1230 Tenderfoot Hill Road. A three-story office condo building will take its place.

Thomas General Contractors will handle construction of the 28,000- square-foot project.

Ray Thomas and Joe Niebur built two similar condominium office buildings at Scarborough Drive and Research Parkway, the first of which is completely leased. The second was just completed and is partially leased.

The duo paid $1.15 million for the building and land, but anticipates spending between $5 million to $6 million by the time shell and tenant finish construction are complete. The building's shell will be completed within six months, said Troy Coates of Niebur Golf, with first tenant move-ins expected in six to eight months.

Coates said the project will include razing the single story structure, but maintaining the original foundation and floorplate. Parking will be designed to accommodate medical users, but the tenant mix will probably include non-medical office users, said Lonnie Wagner of NAI Highland Commercial Group.

Wagner and Ted Link of Cascade Commercial Group are co-listing the project.

Garden Park lease signed

Frontier Radio Communications has signed a 3,000-square-foot lease at 1110 Elkton Drive, Suite J.

The tenant was represented by Jim Chacon of Coldwell Banker Commercial and the landlord, Elkton-Garden Park LLC, was represented by John Rodgers and Andrew Madden of Grubb & Ellis Quantum Commercial Group.

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