Colorado Springs Real Estate Briefs: June 25, 2004

Colorado Springs Business Journal, Jun 25, 2004 by Julie Andrews

NAI Highland Commercial Group recently announced the sale of 3755 Mark Dabling Blvd. to Kaiger LLC for $3.15 million. John C. Onstott of Highland Group assisted the seller, M&M 03 LLC, and Jerry Knauf, The London Group, assisted the buyer. The 53,632-square-foot building will be used for sale and distribution of hats and other licensed products.

Scott Gray and Melissa Southwick of Olive Real Estate Group represented seller Realty Income Corp. for 6625 Delmonico Drive. Kim Murphy, also with Olive Real Estate, represented the buyers, William and Bruce Eskew. The 5,020-square-foot building sold for $500,000 and will be converted from a child care center into an accounting office.

NAI Highland Commercial Group announced two leases. Bennett Frank Tuck was listing agent for owner J. Thomas Stoen in leasing 5245 Centennial Blvd. Peter M. Scoville and Michael Payne Palmer, also of Highland, assisted tenant Comfort Keepers, which will use the 2,055- square-foot space for non-medical home care.

Randy C. Dowis of Highland was the agent for Pikes Peak Moving and Storage, which leased 16,700 square feet at 30-A Mount View Lane. Axis Realty was agent for owner Mount View Park L.P.

Classic Homes has 15.5% market share

After winning honors with Professional Builder Magazine's ranking of 122nd largest home building company in the nation, Classic Homes ranked No. 1 in El Paso County in the number of new home closings in the first quarter, according to Home Builders Research report.

That position represents a 15.5 percent market share - just about the number of years this locally owned home builder has been around. Founded in 1989, the city's biggest builder owns several companies, including commercial construction and development, and a mortgage company.

At Chaparral Point at Indigo Ranch, northeast at Stetson Hills Boulevard and Marksheffel Road, Classic is entering four homes in the Parade of Homes to show its take on the neo-traditional neighborhood.

This means back-loaded homes (garage to the rear) and one- and two- story plans of 1,100 square feet and up, priced around $150,000. Classic's best activity follows the Powers Boulevard corridor, with Springs Ranch and Indigo Ranch contributing most to its 567 closed units last year. This year's projections are for 571 total units closed, said Dan Winter, executive vice president of marketing.

We've been seeing some pick-up in the upper price range but $200,000 to $300,000 has still been our bread and butter, primarily the bulk in single-family detached. Probably 10 to 15 percent of closings are attached styles.

Classic's Flying Horse development, on 1,500 acres by Northgate Road and Highway 83, is the newest project and will take the focus this year and next.

The Flying Horse golf course is under construction and ground has broken on the school site, planned for opening in fall 2005. Home construction begins shortly on the first two filings, with work under way in the realignment of Northgate Road.

The overall market is deepening, Winter said. Last year, our concern was that we were stripping people out of apartments and people were driven by interest rates.

What we're seeing now is sales have stayed up. When interest rates tick up, the sales are still there. Activity at Classic's High Forest Ranch development, north of the city, topped at 27 sales in February for home sites in the $200,000 range.

Computers indirectly drive demand for homes. It's not just the interest rates, I think it's the economy, it's job growth. I believe there's always this hidden job market out there.

High tech companies don't announce jobs. Computers have changed everything, the Internet has changed everything, and it's starting to have an effect.

As buyers emerge this year that lacked confidence to buy in 2003 one of their new concerns is for safety and security, desiring a gated community even if they can't afford to buy in one. Another perk homebuyers want is open space.

As lot sizes dwindle, Classic has found pocket parks popular. The buyers want a little spot where it opens up, so we design parks in - it's not just neighborhoods of houses anymore.

The toughest challenge Classic faces this year is fighting rising costs, mainly in cost of materials along with fees and requirements. Plywood and steel have dramatically risen in price.

Land values also continue to rise and builders pay an average of $40,000 to $50,000 for developed lots. Ten years ago Classic bought lots for $16,000.

One key element in Classic's strategy is Classic Mortgage, founded in 1994 for the company's homebuyers, but now expanded so that 50 percent to 60 percent of its business comes from outside sources.

Last year Classic Mortgage made 1,500 home loans for an average of $168,000 and eight commercial loans averaging $3.75 million.