Development Activity Drives Record-Breaking Year in Colorado Springs
CBRE has released its H2 2021 industrial, office, and retail reports for the Colorado Springs market. Development activity in 2021 drove a record-breaking year in the industrial market and helped the retail market accelerate. Resilient office market fundamentals attracted record investor confidence.
- Over 3.9 million sq. ft. of new industrial product was delivered in H2 2021. This number was largely driven by the completion of Amazon’s 3.7 million sq. ft. distribution and sorting facility at Peak Innovation Park. The project was completed in Q3 2021.
- Amazon’s occupancy helped produce 3.8 million sq. ft. of net absorption in 2021, the highest total ever recorded in the Colorado Springs industrial market.
- The average direct asking lease rate increased 5.9% year-over-year to $10.73 per sq. ft. NNN in Q4 2021.
- Total availability fell 119 bps year-over-year to 5.0% while direct vacancy dropped 40 bps to 4.1%.
- Sales volume for H2 2021 exceeded $110.8 million, bringing yearly sales volume for 2021 to $149.7 million, a 33.3% increase year-over-year.
- Nearly 492,000 sq. ft. of positive net absorption was recorded in H2 2021, more than double the amount recorded in the first half of the year. Annually, 236,000 sq. ft. of positive net absorption was recorded in 2021, up considerably from negative 25,796 sq. ft. of negative net absorption in 2020.
- Direct vacancy increased 50 bps to 9.9%, while total availability recorded a marginal decrease of 10 bps to 11.9%.
- Construction slowed down in the second half of 2021, with just under 140,000 sq. ft. of projects underway. Four properties delivered in H2 2021, including Ent Credit Union’s 324,000-sq.-ft. headquarters, pushing annual deliveries to 425,000 sq. ft.
- 2021 was a record year for investment sales with a total sales volume of $475.0 million, up 150% from 2020.
- Direct average asking lease rates recorded marginal growth in 2021, rising to $16.67 per sq. ft. NNN, a slight 1.2% increase from 2020.
- Over 367,000 sq. ft. of annual net absorption was recorded in 2021, offsetting the negative total recorded in 2020.
- The average asking lease rate increased to $15.28 per sq. ft. NNN in 2021, a 1.2% increase year-over-year.
- Total availability fell 80 bps year-over-year to 7.0% while direct vacancy dropped 40 bps to 6.0%.
- Development activity remained active throughout the year with over 328,000 sq. ft. of retail space under construction at year-end.
- Overall sales volume for H2 2021 reached $130.8 million, bringing the annual total to $204.5 million—a 61.8% increase from year-end 2020.