Colorado Springs Real Estate Briefs: February 22, 2008

Tim Leigh of Hoff & Leigh Real Estate and builder Mike Reeg, both principals in Canon Builders LLC, have found a niche in one of commercial real estate's newest submarkets.

The partners recently completed the first phase of a $9.5 million, three-building Northgate Road office condominium development that will include 57,300 square feet, across from the Federal Express building.

A second 20,400-square-foot structure will break ground next month and is expected to be completed this fall.

The office campus sits 50 feet above the Interstate 25 roadbed. Its stucco and blue windowed exterior was designed to mirror the look and feel of the United States Air Force Academy to the west.

So far, 30 percent of the units in the first building have sold and the duo has commitments for another 60 to 70 percent, Leigh said.

In Paul Turner's 2007 report about commercial real estate, office condominium sales slipped, but Leigh said that's because much of the product on the market wasn't designed to meet market demand.

"We've lowered our prices to around $15 per square foot, triple net, to allow buyers to make a real return," he said. "That means that an investor can buy the condo, lease it out or occupy it and still see cash flow plus tax benefits. There's been a lot of larger floorplate product out there at a higher price. You can't see any upside in a deal like that."

Government leases more space

The Government Services Administration has just upped its presence in the Pikes Peak region by leasing 11,000 square feet of warehouse-distribution space in the Airport Business Center at 2510 Aviation Way.

As one of the area's largest real state owners and tenants, the GSA controls more than 335,000 square feet of local commercial space, which is occupied by a variety of government users.

John Rodgers of Peak Commercial Properties represented the landlord, William Mackey, and the GSA.

Big move for local company

During 2008, Colorado Springs Windustrial, a pipe, valve and fittings wholesaler that serves mechanical contractors and commercial contractors throughout the region, will more than double the size of its Colorado Springs operation.

President Rich Clayton said the move to 15,000 square feet at 3200 N. Nevada Ave., into a building owned by The Craddock Cos., will provide warehouse and outside storage space. The building was formerly occupied by Daniels Chevrolet Auto Body.

Clayton worked with John Rodgers of Peak Commercial Properties to find the new location. Rodgers also represented the landlord in the transaction.

The company has supplied materials to projects such as the Intel expansion, schools, public buildings and correctional facilities. The company has projects in Texas, New Mexico and other nearby states.

The company's former 6,000-square-foot facility was located south of downtown at 1309 E. Cheyenne Road.

Clayton expects his moved to be completed by March 3.

Fort Carson housing notes

While local landlords and home builders have waited patiently for the return of deployed, re-assigned and new troops, John Kidd, a retired Army colonel who works for multifamily developer Place Properties, sees plenty of activity ahead.

The corporate liaison to military housing offices on installations throughout the country expects off-post rentals and home sales near Fort Carson to pick up dramatically during the next 18 to 24 months.

He bases his projections on a standard 20 percent on-post housing goal for active duty military residences. That means that by 2013, the Army post could justify 6,000 units. At present, Fort Carson has about 2,500 housing units completed or under way. Another 2,000 units are planned, but those are typically occupied by families.

Single soldiers and many families likely will look for housing off post. The Pikes Peak Area Council of Governments estimates that of all active duty military families, nearly two-thirds will buy homes.

"There's always lag time between the need and when the budget is allocated," Kidd said, adding that developers can build quickly once Congress approves the money -- but even then, there won't be enough on-post housing to meet the need.

As the representative for Independence Place, a 300-unit apartment complex catering to single soldiers which is expected to be completed by 2010, Kidd said he believes the influx of troops through 2013 will push the local community just to keep up.

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