128 South Tejon Picture_1The historic four-story Alamo Hotel building in downtown Colorado Springs was recently purchased for $5.9 million by a local investor.

Matterhorn Development LLC sold the 42,556-square-foot building, which was constructed around 1900, to Carlisle’s Alamo LLC. Matterhorn purchased the property in 2006 for just $200,000 less than the sale price.

Cascade Commercial Group brokered the sale and will be retained to market the building for lease.

“What makes this sale unique is the good properties are not lasting long,” said Cascade Broker/Owner Ted Link in an interview. “They are being sold at an astonishing rate.”

Located at 128 S. Tejon St.,  the building, which represents only a fraction of the original Alamo Hotel, was remodeled in 1976. The remaining structure includes some original amenities and the original stone facade.

“The building has wonderful, classic architecture,” Link said.

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Cascade said that the building, which sold for $138 per square foot, was 90-percent occupied upon closing, with significant tenants including the Gaspar Law Group, the Law Firm of Graham and Black and MacKenzie’s Chop House–occupied by Concept Restaurants since 1975.

The report by Cascade noted that the buyer was specifically interested in the “historic nature and charm of the old hotel along with its proximity to the court house.” The report also stated that the buyer was also interested in the occupancy rate, quality of construction and abundance of long-term leaseholders.

Cascade reported that the property sold near an 8-percent capitalization rate with financing arranged through Terrix Financial.

“CAP rates were higher in the beginning of the year, ranging from 9-10% and they have now dropped,” Link said. “One of the reasons long term debt has stayed fairly consistent is because the feds have not increased the living rates.”

Link said that the building remains a longtime favorite for attorneys and legal offices due to its close proximity to the courthouse.

The Alamo Hotel building was listed on the U.S. National Register of Historic Places in 1977. According to History Colorado, the building was originally constructed in the mid 1880s with additions built throughout the remainder of the 19th century.