Retail Overview
The vacancy rate decreased to 4.8% from Q1 and there was a positive net absorption of 82,600 square feet over the past 12 months. The average asking rental rates increased slightly to $21.21 PSF from $20.18 PSF, from Q1. For the second quarter, there are 237,598 square feet under construction.
Tenants continue to take down space in the Colorado Springs retail market, driven by quick service restaurants and service-oriented businesses. This segment has also benefited from growth in discounters, cellular service retailers, and retailers in the home improvement categories. Low availability is beginning to impact leasing activity as tenants face challenges securing the right type of space.
Office Overview
The vacancy rate increased to 11.1% and there was a positive net absorption of -379,000 square feet over the past 12 months. The average asking rental rates decreased to $21.79 PSF from $22.24 PSF, from Q1 of 2025. For the second quarter, there are 0 square feet under construction.
The Colorado Springs office market is facing demand challenges. However, Rent growth is outperforming the national average at about 2.8% positive annual gains, compared with 0.6% rent gains from the national index. With no projects under construction, the market has no supply-side risk in the near term, which should help in keeping vacancies in check.
Industrial Overview
The vacancy rate increased to 5.5% and there was a net absorption of 48,500 square feet over the last 12 months. The average asking rental rates increased to $11.65 PSF. For the second quarter, there are 708,746 square feet still under construction.
In-line with national trends, rent growth in the Colorado Springs industrial market has decelerated following its peak achieved in Q3 of 2022 when annual rent growth reached 7.8%. Average rents were above the national average until late 2021, but have since fallen slightly below due to the market’s slower pace of rent growth.
THRIVE News
| THRIVE assisted their clients in multiple closings this quarter. A couple of notable sales include:· SOLD – A new gym with accompanying retail and office at 27 N. Union Blvd.· SOLD – Local buyer for a Multi-Family investment deal at 4540 Hwy 67 in Florence, CO· SOLD – Office space at 1771 8th St.· SOLD – Ministry Services at 124 Delaware Dr. Additionally, THRIVE brokers aided their clients in leasing spaces at numerous locations across Colorado Springs including:· Quantum Leap at Focus on the Family Campus (represented both sides)· Mike’s Mountain Pizza at Shiloh Mesa· Cook Rector Pearce at Chapel Hills Atrium· Priority Roofing at Compassion International Campus· Pick It Up Fitness at Legacy Landing· Ransford Engineering off Kiowa St.· Miller Verchota Inc. off Campus Dr.· Holy Grail off Weber St. Highlands at Briargate Updates: Groundbreaking has commenced by Davis Development on 220 luxury apartments and 20+ luxury townhomes. Only three inline spaces remain. |
