Colorado Springs Retail in 2020
A 2019 Market Overview and Trends for the New Year
As Colorado Springs continues to see significant population growth and receive top marks in the affordability and attractive lifestyle categories in national surveys, it also has experienced consistent annual growth in tourism. Colorado Springs has over 300 days of sunshine every year and offers access to the beautiful Rocky Mountains within minutes; Garden of the Gods Park alone receives over a million visitors each year. As downtown Colorado Springs is receiving record-breaking investment, national retailers and restaurants are taking notice and setting up shop in Colorado Springs.
Colorado Springs is not only the headquarters for the United States Olympic Committee, home of one of the US Olympic Training Centers and many governing bodies, but in 2020 the much-anticipated US Olympic and Paralympic Museum is slated to open. This will attract many more tourists to the Front Range. Tourism, as well as our growing business sector along with military has driven the retail market. From local breweries, distilleries, restaurants and fitness concepts all the way to large companies such as In-N-Out, Scheel’s and many hotels, the north side of Colorado Springs continues to boom with retail developments.
In 2019, the total retail footprint was 42,081,594 sf with a vacancy rate that remained steady at 4.7% from 2018 even with an additional 247,000 sf of new retail space delivered last year. The overall asking lease rates dropped by 2.4% over 2018 to $16.40 psf currently. Currently, there is 179,303 sf under construction that we anticipate being delivered to the market in 2020. Retail building sales were up from 2018 with a total of 184 transactions, equaling an estimated of $367 million dollars at an average cap rate of 7.1%.
Overall, we forecast that in 2020, vacancy rates will remain steady while the average asking rates will decrease slightly. While construction costs will likely go up, most landlords will not be providing significant tenant improvement allowance. We anticipate seeing our local brands expanding, while regional and national brands remain engaged and very interested in our market.