Market Summary
A boom in consumer spending is boosting Colorado Springs industrial fundamentals. The pandemic accelerated the rise of e-commerce, but retail sales at brick-and-mortar locations are also rising, leading to increased demand for distribution centers across the city where goods can be stored before reaching the consumer. Retailers and logistics providers are increasing their industrial footprints to improve their distribution networks and bulk up on inventories. Consistent demand, in conjunction with minimal supply pressure, has kept vacancies low near 5.4%. Amazon positioned itself to take full advantage of the shift to e-commerce, both locally and on a national scale. The online retailer has aggressively expanded in Colorado Springs, preleasing a 4-million SF distribution and sorting center in 2018. The complex, located in the airport’s Peak Innovation Park in the Southeast submarket, delivered in October and is adjacent to a delivery station that Amazon opened in 2020. Amazon plans to hire 1,000 workers at the new location. In total, Amazon plans to hire 2,200 people across the Colorado Springs metro. With the retail sector facing challenges related to the rise of online buying, retail-to-industrial conversions are
gaining traction, though these can be complicated to execute. Amazon has taken over a former Sam’s Club in the East submarket, leasing 135,000 SF in March 2021. Construction on the conversion wrapped up in late 2021. High demand for industrial product is driving rent growth.
Annually, rents have increased by 5.6%. However, the pace of rent growth remains below the national annual average of 10.1%.
Industrial Overview
The vacancy rate decreased to 5.4% and there was a positive absorption of 4.5M square feet over the last 12 months. The average asking rental rates increased to $10.16 PSF. For the first quarter, there are 111,000 square feet still under construction.
Office Overview
The vacancy rate decreased to 9.1% and there was a positive net absorption of 336,000 square feet over the past 12 months. The average asking rental rates increased to $23.18 PSF from $22.57 PSF, from Q4. For the first quarter, there are 134,559 square feet under construction.
Retail Overview
The vacancy rate decreased to 4.6% and there was a positive net absorption of 495,000 square feet over the past 12 months. The average asking rental rates increased to $18.20 PSF from $17.74 PSF, from Q4. For the first quarter, there are 259,798 square feet under construction.
Recent Sales
- THRIVE facilitated the sale of Springs Ranch Shopping Center.
THRIVE also facilitated sale of 66 acres off Hwy 94 in Ellicott, CO.
New Team Members
We are very pleased to announce that, this quarter we added a new role and a new team member to our Thrive Family!
Alex Tovar
Alex’s passion for excellence in leadership is fueled by his devotion to mentoring others to achieve the best version of themselves. He is passionate about serving others and implementing structures and procedures that make businesses succeed. A native of Guatemala City, Guatemala, Alex immigrated to the US in 1985 when his father took a post at the Guatemalan Embassy in Los Angeles, CA. Alex has extensive management experience in Finance, HR, Strategic Initiatives, and Leadership Development. He also serves as COO for International Students, Inc., a faith-based non-profit that provides outreach to international students in the US and around the world. Prior to his work in the non-profit sector, Alex served for almost 10 years at Galpin Motors, Inc. in Los Angeles, CA—a family-owned entity often ranked as the nation’s #1 Ford, Mazda, Jaguar, Lincoln, Volkswagen, Aston Martin and Porsche dealer group that owns several multi-acre retail dealership and support facilities. During his time with Galpin, Alex worked on extensive land acquisition and commercial real estate transactions including 1031 exchanges and land development deals. He holds a Bachelor’s in Theology from the King’s University, and an MBA from Colorado Christian University. Alex has been married to his life-long friend, Lily for 25 years! They have lived in Colorado Springs, CO since 2006. They have three children, Ella, Lucas, and Maxx. The family dog, Mr. Knightley, is one amazing Miniature Schnauzer. They attend and serve at New Life Church in Colorado Springs.
