CBRE Releases Mid-Year Reports for Colorado Springs

CBRE has released its Mid-Year 2022 Reports for the Colorado Springs market. The retail market posted record-high sales
volume through the first half of 2022, while industrial activity remained strong and office absorption was robust.

Industrial Highlights

  • Nearly 333,000 sq. ft. of positive net absorption was recorded in the first half of the year, a large increase from the 88,000 sq. ft. posted in H1 2021 but down from the second half of last year when Amazon’s new 3.7 million-sq.-ft. fulfillment center was opened.
  • 413,000 sq. ft. of industrial space was under construction as of mid-year 2022 and over 260,000 sq. ft. of new space was delivered.
  • The average direct asking lease rate has remained stable at $10.66 per sq. ft. NNN.
  • Direct vacancy remained flat at 4.2% since Q4 2021 while availability fell 50 bps to 4.5%, highlighting continued industrial demand in Colorado Springs.
  • Sales volume for H1 2022 exceeded $133.7 million, a record-breaking first half in the Colorado Springs industrial market and more than triple the volume recorded in H1 2021.

Office Highlights

  • The Colorado Springs office market carried momentum from a strong second half of 2021, finishing H1 2022 with 150,000 sq. ft. of positive net absorption—up from negative 233,000 sq. ft. of net absorption recorded during the first six months of 2021.
  • Direct vacancy decreased 90 bps from 9.9% in H2 2021 to 9.0% this half. Vacancy in the Greater Downtown submarket remained low at 4.5% and continued to increase in the Northwest submarket to 20.5%.
  • The direct average asking lease rate remained stable in H1 2022, dropping by just 1.4% since the end of last year to $16.41 per sq. ft. NNN. The Northeast submarket posted the highest average lease rate at $18.54 per. sq. ft. NNN.
  • The development pipeline has diminished to just 44,000 sq. ft. of new projects underway. Four properties delivered in H1 2022, including the 50,000-sq.-ft. Peak Technology Campus Building 1.
  • After a record year in 2021, year-to-date investment sales activity declined by 27.0% year-over-year. Sales volume in H1 2022 totaled $135.3 million with an overall average price per sq. ft. of $171.96.

Retail Highlights

  • Over 308,000 sq. ft. of annual net absorption was recorded in 2022, the third consecutive half of positive absorption
  • The average asking lease rate remained flat at $14.81 per sq. ft. triple net to start 2022.
  • Total availability marginally increased to 7.2% while direct vacancy dropped 50 bps half-over-half to 5.5%.
  • Development activity remained active with nearly 362,000 sq. ft. of retail space under construction as of mid-year 2022.
  • Overall sales volume for H1 2022 reached $233.8 million, a large increase from $73.7 million posted in H1

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