Even though the national real estate market has been cooling for the short term, Colorado Springs residents, buyers, and sellers in the commercial space are just as busy as they were before.
We’ll take a closer look at Colorado Springs’ commercial real estate market and why it’d be attractive for commercial real estate investors.
Colorado Springs CRE Overview
Colorado Spring’s commercial real estate markets have been relatively stable, unlike most other major cities, since 2020.
- Overall, the commercial real estate market finished the year with a commercial rental rate of $17.2 per square foot and a commercial vacancy rate of 12.68 percent.
- However, looking at Q2 2022 activity, the area’s vacancy rate has dropped to 11.3 percent.
- During the first six months of 2022, average asking rents increased by 6 percent to $17.51/sqft.
Most tenant activities in the past three years have been from small business owners renting space in the building. However, Department of Defence tenants has remained highly active for multiple years.
Colorado Springs Office Space Review
The Colorado Springs office sector ended the first half of 2022 with 150 000 square feet of positive new lease activity, up from 233,000 square feet of negative recent lease activity recorded during the same period last year.
- During the first six months of 2022, sales volume was $135.3 million. On average, each square foot sold costs $171.96.
- Vacancies in the greater downtown submarket remain low at 4.5% but continue to rise in the northwest submarket to 20.6%.
- The Northeast submarket had the highest average monthly rent at $18.54. square ft.
Watch out for office activity as more companies start pushing employees to return to the office.
Colorado Springs Industrial Market
Industrial real estate sales volumes for the first half of 2022 surpassed $133.7 million — a new record for the Colorado Springs industrial sector.
- When comparing year-over-year, the 2022 number adds up to more than three times the volume recorded during the second quarter of 2021.
- Rent prices have risen annually by 6.9%
- High demand and minimal supply pressures have made for an average of 5.0 percent vacancies.
Growth trends are expected to continue.
Colorado Springs Retail Market
During the first half of 2022, consumers spent at an unprecedented pace, sending total sales volume for Colorado Springs to $233 million during the first six-month period of the year.
- The market price now sits at $194/SF, slightly below the national average of $220/SF.
- Development activity was quite active, with nearly 36,200 square kilometers (14,400 square miles) of retail space under construction.
- Over 3 million square feet of annual net absorption was recorded in 2022, the third consecutive half of positive absorption.
As more consumers prefer going back to shopping in stores, commercial retail real estate in Colorado Springs is projected to remain relatively steady through 2022.
Final Thoughts on Colorado Springs Commercial Real Estate Market
Commercial real estate activity in Colorado Springs has been quite active in Q2 2022.
Commercial real estate has emerged as one of the most desirable markets for investors in the western United States, especially in Colorado Springs.
Investors appreciate the region’s skilled and well-trained workforce, educational institutions, and recreation opportunities.
As the area’s average household income rises above national averages, so does its consumer base, which is good news for commercial realtors looking to invest in their local markets.