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Page 6 — Retail Properties Quarterly — February 2017
T he momentum continues!
Colorado Springs’ retail has
been steadily strengthening
since the most recent 2012
bottom with average rents
increasing from $12.34 per square
foot triple net to $14.32 at end-of-
year 2016. The vacancy rate dropped
from 12.3 percent to 9.4 percent in
the same period with anchored cen-
ters at 6.4 percent and unanchored
centers at 14 percent, according to
the Turner Commercial Research
commercial availability fourth-quar-
ter report.
New retail development is natu-
rally following the new rooftops
with the bulk of the growth east and
north-northeast. Our first King Soop-
ers Marketplace is nearly complete
at Marksheffel Road and Constitu-
tion Avenue on the east edge of
town. The Powers Boulevard retail
corridor continues to be strong with
the new Sprouts-anchored center at
the southwest corner of Barnes Road
and Powers and a multiuse project
set to go on the northwest corner of
Plaza at Barnes-West. Parts of the
central and South Academy Boule-
vard corridors continue to struggle
as several owners look at repurpos-
ing much of that inventory, while
others are having success in re-ten-
anting and refurbishing centers.
Significant new retail and hospi-
tality/entertainment development
is taking place in the Flying Horse/
Northgate/Interquest area follow-
ing the quality residential develop-
ment in that area. The previously
unfinished 311-room Renaissance
Hotel in Interquest opened Dec. 26
as Great Wolf Lodge, a family ori-
ented water park
resort, with the
water park access
available only to
resort guests. It
will be a great traf-
fic generator for
nearby retail busi-
nesses as it draws
in regional tour-
ists from Colorado
and surrounding
states. A competing
400-room Colorado
Grand Hotel with
an open-to-the-
public water park
is planned in Polaris Point, formerly
Copper Ridge, 2 miles to the north
near Bass Pro Shop. Nearby is the
68,000-sf, two-story Overdrive Race-
way, which is a first in the U.S. elec-
tric go-cart raceway. A Sprouts/Ace
Hardware-anchored center at the
southeast corner of Northgate and
Voyager Parkway is filling its in-line
space.
Fewer centers, in size and in num-
bers, traded in 2016 as compared to
2015 and 2014. The more significant
ones were Market Center at 180,000
sf, Fountain Valley Shopping Cen-
ter at 71,000 sf and the City Market
Center in Woodland Park. Numerous
smaller in-line centers traded, but
the overall square footage of retail
buildings sold was down by 70 per-
cent and the number of centers sold
was down by 44 percent, according
to the TCR report.
Craft Breweries, brewpubs, distill-
eries and ciderhouses are popping
up in all kinds of locations and,
because adult beverage connoisseurs
are a discriminat-
ing group, they will
find the obscure
location if the
quality is great.
Recent additions to
the scene are Cog-
stone Brewery, Lost
Friend Brewing Co.,
Cerberus Brewing,
Goat Patch Brew-
ing, Iron Bird, Local
Relic, Lee Spirits in
Brooklyn’s on Boul-
der, Axe and the
Oak, Cockpit Craft
Distillery and Colorado Common.
With as much confidence as the
craft beverage scene, new restaurant
concepts are finding their proper
places in the market and filling
voids along the way. Restaurants
such as Till Kitchen, Prime 25, Odys-
sey Gastropub, 503 West, Over Easy
and Bingo Burger, to name a few, are
breaking the mold on the old and
standard. They’re offering locally
sourced ingredients when possible
and bringing the “goods” to those
who’ve been starving for this kind of
quality for too long.
Key to continued growth is genera-
tion of additional jobs. The health
care sector has nearly $1 billion in
construction scheduled in the next
several years with three new hospi-
tals, two major hospital renovations
and various other medical-support
facilities. In the short term we get
construction jobs, and in the long
term we get the permanent health
care jobs.
Another sector poised for sig-
nificant growth is cybersecurity.
The state Legislature has approved
$8 million to create the National
Cybersecurity Intelligence Center in
the former TRW plant, adding 100
high-paying jobs with potentially
thousands of additional jobs from
businesses wanting to locate in the
vicinity. In addition, the Air Force
Academy has spun up its Cyberworx
project bringing cadets and cyber
professionals together on practi-
cal research projects. The Air Force
Space Command is building an ever-
more robust cyber program to com-
bat cyber aggression on our satellites
and other military assets. Root9B is
ranked the world’s top cybersecurity
firm by Cybersecurity Ventures and
announced relocation of its head-
quarters to Colorado along with the
current operations center. The ongo-
ing threat coupled with the recent
publicity on our cyber vulnerabilities
portends significant growth in this
relatively new sector.
The housing market has been tor-
rid with a record 15,318 single-fam-
ily home sales in 2016. The previous
record was in 2015, making for two
back-to-back records and indicat-
ing an economy that is on its way
to full recovery. There were 3,237
single-family home permits pulled
for 2016, which is the most since
the 2008 Great Recession, according
to the Pikes Peak Regional Building
Department. Multifamily permits
totaled 1,424, which is on top of very
strong multifamily permits in 2014
and 2015. In total, there were per-
mits pulled for $2,053,541,498 in new
construction in the market.
We see the overall market continu-
ing to strength into 2017.s
James E.
Spittler, Jr.,
SIOR
Principal, NAI
Highland LLC,
Colorado Springs
Logan C.
Harrison
Commercial broker,
NAI Highland LLC,
Colorado Springs
Market Update