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— Retail Properties Quarterly — November 2015
Featuring
HIGH-DEFINITION SURVEYING
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We are pleased to announce
Please contact us for a quote on
your next project!
Survey team led by Lyle Bissegger
& Perry Bassett, each with nearly
40 years of survey experience.
Utilizing laser scanning & real-time virtual GNSS reference networks
C
olorado Springs finally is start-
ing to see improved retail
activity, and the box-space
component is no exception.
The 18-month lag in the
economy that Colorado Springs nor-
mally sees in relation to Denver is
narrowing in 2015 as occupancy for
box space increased over the past year
and a half.
Driven by strong retail sales, the
vacancy for box space remains low in
the majority of the Colorado Springs
submarkets and is resulting in new
retail developments throughout the
area. The Colorado Springs market
has four prime retail trade areas:
North Academy, Powers, Broadmoor
and Citadel.
The North Academy area is located
betweenWoodmen Road and Inter-
state 25 in northwest Colorado
Springs. This trade area has no box
space available. Recent additions to
the market include Sky Zone, occupy-
ing 31,372 square feet in April 2014,
and GolfSmith, which took 34,043 sf in
March 2014. Nordstrom Rack is occu-
pying 31,047 sf at Chapel Hills East
Shopping Center, which is scheduled
to open in April. To make room for
Nordstrom Rack, Office Depot reduced
its existing footprint and relocated,
absorbing the 16,500-sf vacancy next
to Barnes & Noble. The North Acad-
emy submarket continues to be very
strong, seeing 100 percent box occu-
pancy for the last two years, with
average lease rates ranging from $10
to $13 per sf and $16 to $20 per sf for
junior-anchor space.
The Powers submarket in east Colo-
rado Springs has a lone box vacancy
of 84,000 sf, formerly occupied by
Kmart at Palmer
Park Boulevard and
North Powers Bou-
levard on the south
end of the submar-
ket. The area saw
some significant
new tenants with
the October open-
ing of Sierra Trad-
ing Post, operating
in 25,377 sf. Other
recent additions
over the last two
years include Planet
Fitness and Big R,
located at Con-
stitution Avenue and North Powers
Boulevard. The new Sprouts-anchored
shopping center at Barnes and Pow-
ers is slated for mid-2016 delivery and
will bring new box opportunities to
the north part of the submarket.
The Broadmoor submarket in south-
west Colorado Springs is tight for
box retailers as well. The former Alb-
ertsons at Cheyenne Hills Shopping
Center is the only vacancy. New box
development began at South Acad-
emy Highlands with the opening of a
national chain discount-department
store and a national chain discount-
warehouse store, and phase two of
that development will bring more box
options for the southwest submarket.
The Citadel area in central Colorado
Springs has the most opportunities
for box retailers, as the area’s average
annual household income of $41,000
prevents some traditional retailers
from entering the submarket. Cur-
rently, there is approximately 500,000
sf of space available, including Rustic
Hills North and South, the former
Macy’s department store at The Cita-
del mall and several other smaller box
spaces. In the last two years, Conn’s
Home Plus and At Home – The Décor
Superstore absorbed large blocks of
space. The two retailers combined
to take 170,843 sf, which was very
impactful in the submarket.
The strong box occupancy is sup-
ported by the increased retail sales
throughout the entire trade area.
The city of Colorado Springs recently
released the Sales and Use Tax Rev-
enue Report for August showing 2015
sales tax collections were up 10.4
percent year over year. Specifically,
restaurant sales tax collections were
up 7.98 percent and clothing store
sales and department and discount
store sales were up 3.5 percent and
2.76 percent, respectively. In Septem-
ber, sales tax revenues dropped 1.3
percent from the high seen in August.
However, restaurant sales tax collec-
tions in September totaled $2 million,
which is the largest collection record-
ed by an industry in the month.
Retail vacancy in the market has
consistently declined over the last
seven years to 5.5 percent in the third-
quarter 2015, compared with a high
of over 8 percent in 2009, according to
Whitney
Johnson
Associate broker,
retail services,
CBRE, Colorado
Springs
Market Update
Courtesy CBRE
