April 18, 2003

REAL ESTATE: New Empire’s success old hat for downtown Real Estate

FORT COLLINS — From the time Linda Perry listed the New Empire Building, nee Mountain Empire Hotel, she took a steady stream of calls from would-be tenants.

“We showed the space almost once, sometimes twice, a day since the first of January,´ said Perry, a broker for Re/Max First Commercial in Fort Collins.

The pace of showings appeared to prove two things about the market for retail real estate in Fort Collins:

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  • Downtown Fort Collins hasn’t lost its lure for attracting tenants.
  • Restaurants haven’t lost their appetite for downtown Fort Collins.

    Perry wrapped up six leases for the New Empire’s 11,000-square-foot main floor in late March. Of the six new tenants in the 76-year-old building, five are of the food-service variety, representing 92 percent of the floor space.

    The anchor tenant is HuHot Mongolian Grill, which is taking half of the first floor. Incidentally, HuHot once tried to land a lease at the Northern Hotel before that deal fell through.

    The New Empire, 259 S. College Ave., wowed restaurants because of its “great windows,” Perry said. “It has good visibility. There’s a beautiful patio area out front ? And they liked the sidewalks. Almost everybody could have an outside patio.”

    In fact, the building was so hot, one of the spaces had two suitors. The lease went to the tenant that was first to finish its paperwork.

    “We didn’t have bidding wars, but there was major competition and time crunches for people to sign,” Perry said.

    Holsapple steps in at CSU

    FORT COLLINS — Eric Holsapple, partner in Loveland Commercial LLC, has taken over as interim director of Colorado State University’s Center for Investment and Real Estate Finance on a volunteer basis.

    Holsapple picked up the extra work in January after Elaine Worzala left the school. Holsapple has agreed to lead the CSU program for two years before the school hires a full-time director.

    The Center for Investment and Real Estate has a two-fold mission of education and professional networking, Holsapple said. Among the networking programs is the Northern Colorado Executive Real Estate Roundtable.

    Holsapple’s short-term goal is to hire a full-time administrative assistant, possibly in time for the fall semester. To that end, Holsapple’s company has agreed to donate $50,000 for support costs.

    But that’s just seed money.

    Over the long-term, the Center for Investment and Real Estate has the lofty goal of raising at least $1 million to establish an endowed chair position for the program.

    “Most of these centers are funded with $1 million to $3 million,” Holsapple said.

    Housing sales sagging

    Nothing will boost supply like a lack of demand.

    Housing sales in the first quarter have slumped 15 percent across Northern Colorado, a fact that has turned the tables on historically tight supply side in the housing market.

    “We’ve gone from a normal market of five or six months (of supply) to eight or nine months,´ said Dave Pettigrew, a broker for Prudential Prime Properties in Fort Collins. “That’s put into the buyers’ ballpark.”

    According to Information and Real Estate Services, area real estate agents sold 1,813 homes across the region during the first three months of the year, down from 2,133 the year before. Sales in March totaled 659 homes, down 17.4 percent from March 2002, when 798 homes were sold.

    Among area cities, only Loveland is holding close to last year’s pace. Real estate agents sold 374 homes in the Loveland area during the first quarter, a decline of 6.7 percent from last year.

    In Greeley-Evans, sales are down 11.2 percent. In the Fort Collins area sales have declined 22.7 percent.

    “That’s three months in a row now that we’ve been off substantially from the year before,” Pettigrew said. “I would expect that will probably continue for April, because we lost a good week to two weeks of selling in March (due to the snow storm).”

    Some March sales would have been reflected in April closings, he said.

    Declining demand reflects an intersection of two factors: Job growth has waned over the past two years, and most people who were potential homebuyers have already jumped at the historically low interest rates.

    “There are just so many people who are pretty conservative right now and maybe aren’t ready to make that move up,” Pettigrew added. “It’s just a real holding pattern until there’s some good news” on the economy.

    Ironically, average sale prices are flat in Loveland compared to a year ago, with an average of $217,304 – a difference of just 0.02 percent. The average sale price in Fort Collins is $228,470, up 7.5 percent, while in Greeley the average is $190,578, up 5 percent.

    Loveland’s slow gain in prices could be attributed to its increased sales of condominiums and townhomes, which bring the average price down. Homebuyers acquired 53 condos and townhomes in Loveland during the first quarter, compared to just 35 in the first quarter of 2002.

    “I don’t know how long the prices could be supported with the decline in demand, or that surplus in supply,” Pettigrew said.

  • FORT COLLINS — From the time Linda Perry listed the New Empire Building, nee Mountain Empire Hotel, she took a steady stream of calls from would-be tenants.

    “We showed the space almost once, sometimes twice, a day since the first of January,´ said Perry, a broker for Re/Max First Commercial in Fort Collins.

    The pace of showings appeared to prove two things about the market for retail real estate in Fort Collins:

  • Downtown Fort Collins hasn’t lost its lure for attracting tenants.
  • Restaurants haven’t lost their appetite for downtown Fort Collins.

    Perry wrapped up six leases for the New Empire’s 11,000-square-foot main floor…

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