August 5-August 18, 2015 —
COLORADO REAL ESTATE JOURNAL
— Page 15
Colorado Springs/So. Front Range
by Jennifer Hayes
Despite feeling more upbeat
about the current state of Colo-
rado Springs’ office market, the
statistics don’t look much differ-
ent than two or even three years
ago, according to a second-quarter
report by Colorado Springs Com-
mercial, a Cushman & Wakefield
Alliance.
The vacancy rate has remained
close to 21 percent and quoted
lease rates have had only amodest
increase in the Class Aand B mar-
ket, the MarketView report noted.
While this is a vast improvement
since the market’s low point in
2010, when vacancy approached
35 percent, the momentum the
market experienced from 2011
through early 2013 that led to pos-
itive absorption and dwindling
vacancy rates has been lost, added
report authors Greg Phaneuf and
Peter Scoville of Colorado Springs
Commercial.
Colorado Springs’ office mar-
ket has been impacted by major
employers, such as Everest Col-
lege, Focus on the Family, Quan-
tum Corp. and Verizon, reducing
their workforces or closing opera-
tions and bringing to the market
large blocks of vacant space. Com-
pounding this has been compa-
nies that have historically leased
space to take advantage of poor
market conditions instead pur-
chasing their own space to occupy.
These events, according to the
report, have added large blocks of
space – in some cases more than
100,000 square feet – to the overall
market vacancy and the spaces
are often difficult or cost prohibi-
tive to subdivide for smaller users,
thus remaining available for an
extended period of time.
On the positive side, smaller
companies, especially those in
high-tech, are growing organi-
cally within the community, add-
ing staff and leasing more space,
including Value Options, Spec-
tranetics, Cherwell, HGST, Care
Core and Home Advisors, which
have experienced positive growth.
However, a newcompany coming
to the community and leasing up
one of the large blocks of space has
yet to be experienced, continuing a
slow path to recovery.
The overall vacancy rate ended
the quarter at 21.25 percent with
an availability rate of 22.61 per-
cent.
“With the general health of the
economy, the real estate market
will likely continue to get better
but at a modest pace, meaning for
the time being there will remain
ample opportunities for tenants
to find space that works for them
andat reasonable rates,” the report
added.
Other News
n
Colorado Springs’ multifam-
ily market strengthened heading
into the summer leasing season,
according to
Apartment Insights’
recently released Statistics/Trends
Summary.
The reported noted that in the
second quarter, rents reached new
highs – growing at a “healthy”
annual pace of 6 percent. While
the quarterly vacancy did not
reach a new low, the decline was
substantial and the trailing four-
quarter average is very close to a
historical low.
During the second quarter, the
stabilized vacancy rate for the Col-
orado Springs area decreased by
71 basis points to 5.32 percent. The
current vacancy is nine bps above
the 5.23 percent seen a year ago
and higher than the recent low of
SunCap Property Group
has started construction on a
225,000-square-foot
FedEx
Ground distribution and sort-
ing facility in Colorado Springs.
The tilt-up concrete facil-
ity, located at 125 N. Troy Hill
Road, is slated for completion
in January.
Brinkmann
Constructors
is the general contractor for
the FedEx facility, which will
replace an existing 68,321-sf
center nearby.
Mike Helwege of Colorado
Springs Commercial, a Cush-
man & Wakefield Alliance rep-
resented the seller, ICA Prop-
erties, of the approximately
27-acre site near the Colorado
Springs Airport.
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