Colorado Springs Real Estate Briefs June 18, 2004

Housing and Building Association members announce their upcoming 50th anniversary Parade of Homes, Aug. 5 through 22, at 38 Parade show homes scattered around the region, including Teller County. Tickets are available at area Safeway stores and discounted group tickets in blocks of 10 are sold at HBA's office, 4585 Hilton Parkway (phone 592-1800) to members and Realtors. From executive homes to modest ranchers, the 700-plus member association's builders, subcontractors and suppliers tout their best stuff and it's always great. Commercial Realtors know incoming business leaders also have a discerning eye for homes. Plan to spend several days to check out the 2004 Parade of Homes. The local parade is famous with the National Association of Home Builders as one of the longest running and most successful shows in the nation.

Real estate ties to business sales

When a business sells, the real estate it occupies can make or break a deal, warns Ron Brasch of First Business Brokers. If the building is offered for sale along with the business, the deal has several advantages including a longer loan if financed through the Small Business Administration's loan program. Real estate-connected deals can earn loans of 15 to 20 years, depending on the value of the real estate. Plus, with the real estate as a tangible asset along with the business, the interest rate will be lower, said Brasch, who specializes in business sales. Other advantages include building equity and appreciation with the real estate, and control over escalating rents.

A business owner can separate out the business and resell it if he has the real estate connected. Sellers often initially think of keeping the real estate and leasing it to the business buyer - in principle a good idea but not necessarily best for the seller, he said. A lack of assets can drive down the business price plus make it difficult to obtain financing. Including the real estate allows the business seller to cash out 100 percent.

The condition of the real estate connected with the business is another aspect he's seen influence recent deals. A single-use building in areas such as Manitou Springs, Woodland Park or Old Colorado City can create difficulties in appraisals if not up to current building codes, again forcing down the sales price of the business connected. Occasionally business owners who pay themselves rent don't pay fair market value, and this also stymies a deal. The real estate won't appraise on an income basis, and the business can't sustain a fair market rent. The owner needs to keep up with the business to pay market rate. If somebody wants to sell the business but not the building and charge the owner rent, the business doesn't cash flow at a new rent, explained Brasch.

RCIS gathers

Local real estate professionals gather today at the Antlers Adams Mark hotel to hear the Colorado Springs Real Estate Update, Securing the Future, organized by the Realtors Commercial Industry Society. Last Wednesday's general membership meeting for RCIS included Classic Homes update on the proposed downtown convention center, the United States Olympic Committee Museum and the Hall of Fame. Another chance to get in the loop comes with the group's next general membership meeting July 21. For information about how to join, call Dan Rundgren at 636-8090.

Leases and Sales

Lloyd Riphenburg of Olive Real Estate Group Inc. brokered the lease of 4,700 square feet at 5850 Championship View for The Mortgage Depot of Empire Financial.

Charley Conrad, also of Olive, represented Ortega Enterprises Inc. in the purchase of 4,200 square feet of industrial space on one acre at 6160 Lakeshore Court from JEK-Aspen LLC.

Bob Hartwig, Walker Asset Management, in conjunction with Charlie Madsen, Hoff & Leigh, brokered the sale of 3,800 square feet at 696 N. Circle Drive for seller HMS Union LLC. Lester Colodny, also of Hoff & Leigh, assisted the buyer, Chong Cam Tran. Sales price was $300,000.

Realtor strength

The National Association of Realtors is boasting of its strength in numbers. Membership reached 1 million this year and its political action committee is the largest in the nation. It is ranked second in terms of overall political donations since 1989 with $24 million, according to a four-part series by Inman News. For the curious, it's the American Federation of State, County and Municipal Employees that ranks first with $34.9 million in total contributions.

This year, NAR is seeking 50 percent participation in the PAC by its members. Also of note, the Realtors PAC, which contributed about $1.6 million to federal candidates, gave 51 percent of its donations to Democrats and 48 to Republicans in the 2004 election cycle. That compares to the real estate industry's political donations, which are running at about 62 percent in favor of Republican candidates this year.

NAR's call-to-action matters a lot, according to Steve Cook, vice president of public affairs for NAR. Money is important. Many industries have money to spend. Very few have the kind of grassroots participation that we have. (Elected officials) know that they're talking to voters in their district who can have a lot to say in their next re-election campaign. That's our ace in the hole - more than the money.

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