CREJ - Retail Properties Quarterly - August 2017
The retail and restaurant market in the Pikes Peak region continues to see improvement and doesn’t show signs of stopping, at least anytime soon. Vacancies are maintaining a downward trend, currently hovering around 6.5 percent, there is positive absorption, unemployment is at an all-time low and rent growth remains steady. All of this good news comes despite negative headlines of store closures and bankruptcies. So where is the incongruity? I think it can be explained by the fact that consumer spending is still strong, it is just changing, and “Amazonproof” concepts, such as restaurants, fitness centers, entertainment venues and service providers, are emerging and adjusting accordingly. It’s an evolution. Colorado Springs and the Pikes Peak region continue to see a positive influx of these types of businesses. In the past few months alone, a handful of new-to-market gyms and fitness concepts secured locations or are in the hunt for space. These include both large-format gyms like Vasa Fitness, Chuze Fitness and Crunch Fitness, as well as specialty studios like Burn Boot Camp and other sport-specific training camps. These concepts are great at backfilling larger vacancies and bringing new life and activity to centers, many of which have been deflated in years past by grocery store closings. Other planned or under construction retail activity includes numerous multitenant developments. CVS Pharmacy is making a splash with various sites around town, Oskar Blues Brewery is coming in to downtown, and there are an assortment of local breweries arriving – including Trails End Self-Pour Taproom, Goat Patch Brewing, N3 Taphouse, JAKs Brewing, Purple Toad and The Brass Tap. Likewise, there are many new restaurants in town or on their way that include Four by Brother Luck, Prime 25, Rooster's House of Ramen, Atomic Cowboy/Fat Sully’s Pizza/ Denver Biscuit Co. combo, Loyal Coffee, The Melt, Blaze Pizza, Billy Sims BBQ, DogHaus and Sawara Sushi. Plus, we just got our very own WhirlyBall (imagine equal parts basketball, lacrosse and bumper cars, originating from Chicago). We are fortunate to have a good velocity of fresh restaurants, bars, entertainment uses and retailers coming to the market. However, it’s not all new concepts. Many of our staple quick-serve restaurants and fast-food groups are growing as well. Qdoba, MOD Pizza, Starbucks, Chick-fil-A, Tokyo Joes, Dutch Bros. and Fuzzy’s are expanding or adding stores. Even our local/ region groups are adding units or expanding, including Over Easy, Iron Bird Brewing, Beauty Bar, Salsa Brava and CogStone Brewery. Another trend we are seeing is the arrival of food-hall-type venues, and tenants are flocking to them. There are two fairly established adaptive reuse projects that are housing an array of unique local eateries: Ivywild and Lincoln Center. These unique properties, both formerly elementary schools, serve as social gathering places that offer a refreshing alterative from standard strip centers. Bristol Brewing Co. stands tall as the anchor tenant at Ivywild, among the Principal’s Office, Old School Bakery, Axe and the Oak Whiskey, and others. At Lincoln Center, Goat Patch Brewery is the newest tenant to join Cross Fit Southern Colorado, Lincoln St. Barbers, Building3 Coffee Roasters, Cafe Red Point, Mountain Valley Market, Nightingale Bread and more. Additionally, a Denver developer is under contract on a downtown building to open a food hall similar to Denver’s Avanti or The Source. Finally, the Colorado Springs Public Market recently signed a lease downtown and should be announcing its opening soon. Notice a theme here? These are restaurants, breweries, fitness and entertainment retailers, which are the types of retailers that are thriving – the businesses that offer things and experiences you simply can’t buy online. The Colorado Springs and Pikes Peak region has a great climate for these concepts and it continues to improve.