Colorado Real Estate Journal - April 5, 2017
Extraordinary investment is happening in Colorado Springs. The Downtown Partnership released the second annual state of downtown Colorado Springs report in which it noted an “unprecedented” $601.25 million in completed, in-process or announced public and private investment since 2013 is occurring in the city center. The report, produced by the Downtown Development Authority, noted from 2013 to 2016, $85.32 million in investments were completed with $242.15 million under construction and an additional $273.78 million announced. Highlights of 2016 included: •The 33-unit Blue Dot Place apartments, the first new-built apartments in the downtown core since 1960, were completed and fully leased within four months of opening. •The U.S. Olympic Museum development plans were approved, setting the stage for its 2018-2019 opening. •Construction started on 169 residential units at 333 ECO and nine condominium units at the Bijou Lofts. •The Cimarron-Interstate 25 interchange reconstruction continued on schedule with an anticipated completion late this year. The $113 million project enhances highway safety as well as improves creek and trail access and provides a welcoming gateway into downtown. •The first phase of Catalyst Campus, a $12 million, 100,000-square-foot co-working space was completed. •Downtown’s newest hotel was announced, the 10-story, 167-room Hilton Garden Inn, the first new hotel construction to be built in the core since 1967. The hotel, expected to open in 2018, also is the first high-rise building in downtown since 2001. The 2017 state of downtown report also noted that construction in the city’s core saw a major shift in 2016 with nine large projects breaking ground and a 15-fold increase in permit plan check valuations from 2015. Additionally, 19 land use permits and approvals were issued for 16 individual projects and 662 total building permits were issued in the 80903 ZIP code (the Greater Downtown Colorado Springs Business Improvement District) with a total plan-check valuation of nearly $188 million. The value represents an increase of more than $174 million in new projects by valuation from 2015. Additionally, downtown plan check valuations represented 34 percent of citywide figures. Ten certificates of occupancy were issued in downtown Colorado Springs, representing 5 percent of citywide figures. The report also noted that the Downtown Living Initiative’s (part of the authority’s Experience Downtown Plan, a development and land-use master plan) primary goal is to accelerate progress toward the near-term construction of at least 1,000 new residential units by 2020 and 2,000 new units by 2025. More than 300 units opened or were under construction in 2016. Downtown’s office market represents 22 percent of the city’s base of Class A office space and 12 percent of the overall market with an average asking rate of $21.08 per sf, 63,155 sf of net absorption and a 7.8 percent vacancy rate among all classes in the fourth quarter of 2016. Colorado Springs’ downtown retail market saw the addition of 23 new street-level businesses in 2016 with another 12 announcing openings in 2017. The downtown market comprises 2.43 million sf of retail space with a 2.9 percent vacancy rate in the fourth quarter and an average lease rate of $14.55 per sf, up $1.05 year over year. Other News United Healthcare recently renewed its office lease at the Briargate Office Center in Colorado Springs. It renewed its lease for 21,235 square feet at the building at 1755 Telstar Drive. Dar Briargate LLC, Overland Briargate and Briarcan LLC are the landlords. Greg Phaneuf of Colorado Springs Commercial, a Cushman & Wakefield Alliance represented the landlord. JLL represented the tenant. A hail and dent repair firm inked a lease for 4,000 sf at the Edison Business Center in Colorado Springs. The Hail & Dent Co. of Colorado Ltd. signed the lease for the space at 4680 Edison Ave. It leased the space from Haman Enterprises LLC. Jim Zorman of the London Commercial Group was the listing agent. Taylor Stamp of Quantum Commercial Group Inc. represented the tenant. Transwestern recently released its monthly look at the Colorado Springs market, in which it reported that lease rates and direct vacancy both rose in the office category from January figures. The asking direct rate rose to $16.13 per sf full service and direct vacancy ended the month at 12.19 percent. The firm also reported that there are several large contiguous blocks of office space available, including 139,000 sf at 2424 Garden of the Gods road and 128,484 sf at 1005 E. Woodmen Road. Transwestern also gave a peek into the Colorado Springs industrial and retail markets during February. Industrial saw rates rise to $6.42 per sf triple net and direct vacancy decline to 8.69 percent. Additionally, year-to-date direct absorption stands at 164,558 sf. The Colorado Springs retail market saw rates climb from January to $12.48 per sf triple net and direct vacancy rise to 5.62 percent. However, YTD direct absorption was a negative 84,139 sf.