Colorado Springs Real Estate Briefs: February 15, 2008

It's a sign of the times. Bank-owned properties abound and, as a result, real estate brokers like Wil Szilagyi of Williams Homesellers, a division of Keller Williams Real Estate, are developing new ways to get them sold.

The broker has organized a weekly Saturday tour to market the properties.

Eight prospective buyers participated on Feb. 9. Two said they were investors.

"Because the properties we chose represented some of the best homes on the bank-owned list, it was no surprise to find out that three of them were already under contract by the time we toured," he said. "The really nice homes come off the list quickly."

Pre-qualifying can be done on the spot and no financial information is required up front.

"Mostly we want to create an environment without pressure," Szilagyi said. "I'm just the tour guide -- there's no sales pitch."

Properties on the first tour included homes in the northeast and southeast parts of town. The Feb. 15 tour will include the Tri- Lakes area and the Powers Boulevard corridor.

Center sells for $12.7 million

CenterVest Capital, a San Luis Obispo-based private investor, has purchased the 73,082-square-foot Albertson's Center at Norwood for $12.75 million.

The retail center, at 6945-7095 Austin Bluff Parkway, is anchored by Albertson's and consists of two vacant pad sites totaling more than 3 acres

Marty Indvik of the San Luis Obispo office of Senn-Lee & Associates represented the buyer. Mike Winn, Tim Richey and Chad Flynn of Cushman & Wakefield represented the seller, APC Austin Bluffs LLC.

Multifamily market tightens

The Colorado Springs Metropolitan Area Apartment Vacancy and Rent Survey, compiled by Gordon Von Stroh of the Daniels College of Business at the University of Denver, shows the vacancy rate during the third quarter of 2007 was 8.6 percent, down from 11.3 percent during the third quarter of 2006.

While fourth quarter statistics showed a seasonal uptick in the vacancy rate to 10.8 percent for the Pikes Peak region, multifamily specialist Ken Greene of Apartment Realty Advisors said the increase was the result of calculations performed after one Fort Carson troop deployment and just days before the return of another.

"In addition to the fact that fourth quarter vacancy rates are usually the highest of the year, we saw the additional impact of troops movements in the month of December," he said.

Based on the survey, Countrywide Commercial Vice President Jerry Kendall said that in a market like Colorado Springs, where there are about 44,000 multifamily units, a 1 percent increase in vacancies represents slightly more than 400 apartments.

"As the troops return, however, the market could see a 1,000- unit swing from one quarter to the next," he sad. "The scale here is much different than in Denver where you have 240,000 units through the metro area."

On the subject of apartment construction financing, Kendall said that large national or regional companies might have an advantage compared to small local lenders.

"There's less money available in today's market, and a lot of investment is being funneled to projects on the east and west coasts where there's pent-up demand," he said.

Both Kendall and Greene said that developers and investors are being asked to finance deals with lower leverage. That could delay or even cancel a closing in the current economic climate.

"At an average cost of $135,000 per unit for new construction, it's hard to show cash flow with today's average rent levels," Kendall said. "Lenders now want to see 20 percent to 25 percent net income left after debt is repaid. That's a 10 percent increase over what it was five or six months ago."

Citywide, the average rental rate during the fourth quarter of 2007 increased to $703.82, compared to $691.53 during 2006.

Smaller apartment complexes with nine to 50 units saw lower results, averaging $520.14, while newer and larger communities with 200 to 349 units saw higher average rates of $739.61.

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