The commercial real estate market might be down, but it’s not out. In fact, financial analysts have increasingly recommended commercial property as a key component of conservative portfolios with growth potential.
Their rationale: Lower interest rates are driving cap rates up — very attractive to investors with the cash.
That became evident last week when a California investment group with local ties purchased a medical office building on the Pikes Peak Regional Medical Center campus in Woodland Park for $4.85 million.
The nearly leased-up building was not even for sale 18 months ago when American Oaks-Woodland first reviewed it, but as an investment, it made sense.
American Oaks-Woodland LLC of Newport Beach bought the property, built during 2007, from Tegra Healthcare Properties. Gary Wescomb, manager of American Oak Properties and Paul Cohen of Cohen Commercial Properties in Colorado Springs are primary investors in the corporation.
The property’s address is 16222 Highway 24, part of the hospital campus developed by the Pikes Peak Regional Medical Center Association, a community nonprofit organization.
The floor plan includes 20,000 square feet on two levels, but a 30,000-square-foot two-phase expansion has been designed by Yergensen, Obering and Whitaker Architects. Fry Construction Co. will be the project’s general contractor.
Broker Julie Phillips of Fountain Colony represented the buyer and will handle leasing. Lee Jolivet of Mulliken, Weiner, Karsh, Berg & Jolivet was real estate counsel for the American Oaks-Woodland. Griffis/Blessing, Inc. will manage the property.
Brim Healthcare, operator of the hospital, leases two suites in the building, a specialty practice clinic and a physical therapy clinic. Dr. Malyszek of Woodland Park Surgical Associates and a surgeon at the hospital shares a suite with another tenant, Woodland Park Family Practice.
Freedom Financial Services has leased 3,700 square feet at the Vantage Point office building, 5353 N. Union Blvd.
The landlord, DOT Development Corp. and the tenant were represented by Andrew Oyler of Grubb & Ellis Quantum Commercial Group.
The Boeing Co. has leased 6,426 square feet in the Platte Airpark at 320 Wooten Road on the city’s east side. The building’s owner, Platte Airpark Development LLC was represented by Oyler and the tenant was represented by Marty Johnson of C.B. Richard Ellis.
Sawgrass Fine Furniture & Cabinetry has leased 1,500 square feet at 311 S. Chestnut St.
Josh Dyer of the Equity Group represented the landlord, Chestnut Street Partners, and Andrew Madden of Grubb & Ellis Quantum Commercial Group represented the tenant.
Jon Vennes CPA has leased a 110-square-foot office at 5350 N. Academy Blvd.
The landlord, Westar Capital Investments LLC, and the tenant were represented by Susan Beitle of Grubb & Ellis Quantum Commercial Group.
Metso Minerals stays put
Good news for the industrial community and the city came this week from Steve Bach and Mike Helwege of Bach Commercial Partners, who represented Metso Minerals in a 21,548-square-foot office lease and 1,388-square-foot lab space renewal at 621 S. Sierra Madre.
Julie Phillips of Fountain Colony represented the landlord, JetPort Investors LLLP.
“Metso Minerals is an excellent example of an international research and development company firmly rooted in Colorado Springs,” Bach said, adding that the news is a welcome positive for the local economy.
Energy tax credits available
Residential remodelers might use the newly enacted tax credit for energy-efficient home improvements as a financial incentive to encourage more customers to go green with their renovation projects during 2009.
The IRS Section 25C tax credit for existing homes, which expired at the end of 2007, has been reinstated next year as part of the package President George W. Bush signed this fall, a bill that also included $700 billion to shore up the mortgage and banking industries.
The tax credits have been extended through the end of next year.
Becky Hurley covers real estate for the Colorado Springs Business Journal.