Q4 DEFINITION OF TERMS MarketView 2010: Q4
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Q 4 MarketView 2010: Colorado Springs Q 4 MarketView 2010: Colorado Springs OFFICE INDUSTRIAL RETAIL DEFINITION OF TERMS Average Asking Lease Rate Rate determined by multiplying the asking net lease rate for each building by its avail- able space, summing the products, then dividing by the sum of the available space with net leases for all buildings in the sum- mary. Net Leases Includes all lease types whereby the ten- ant pays an agreed rent plus most, or all, of the operating expenses and taxes for the property, including utilities, insurance and/or maintenance expenses. Market Coverage Includes all competitive office buildings 5,000 square feet and greater in size. Net Absorption The change in occupied square feet from one period to the next. Net Rentable Area The gross building square footage minus the elevator core, flues, pipe shafts, vertical ducts, balconies, and stairwell areas. Occupied Square Feet Building area not considered vacant. Under Construction Buildings which have begun construction as evidenced by site excavation or foundation work. Available Square Feet Available Building Area which is either physically vacant or unoccupied, including sublease space. Availability Rate Available Square Feet divided by the Net Rentable Area. This calculation includes vacant and sublease space and is given as a percentage. Vacant Square Feet Existing Building Area which is physically vacant or immediately available and does not include sublease space. Vacancy Rate Vacant Building Feet divided by the Net Rentable Area. This calculation is given as a percentage and includes vacant space but does not include sublease space. Normalization Due to a reclassification of the market, the base, number and square footage of build- ings of previous quarters have been adjusted to match the current base. Availability and Vacancy figures for those buildings have been adjusted in previous quarters. SIERRA COMMERCIAL REAL ESTATE, INC. 102 S. Tejon, Suite 750, Colorado Springs, Colorado 80903 T. 719.955.2000 • F. 719.955.2019 For more information regarding the MarketView, please contact one of the office brokers listed. Sierra Commercial Real Estate, Inc. 102 S. Tejon, Suite 750 Colorado Springs, Colorado 80903 T. 719.955.2000 F. 719.955.2019 www.sierracre.com www.sierracre.com © Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by Sierra Commercial Real Estate, Inc. clients, and cannot be reproduced without prior written permission of Sierra Commercial Real Estate, Inc. Kenton R. Mau, Senior Managing Director 719.955.2013 [email protected] Randy Miller, Managing Director 719.955.2015 [email protected] Brian Wagner, Managing Director 719.955.2016 [email protected] Lonnie Wagner, Managing Director 719.955.2031 [email protected] Mark G. O'Donnell, Jr., Director 719.955-2017 [email protected] Nicola Myers-Murty, Broker Associate 719.955.2021 [email protected] OFFICE BROKERAGE SERVICES: ´ ´ FORT CARSON FORT CARSON FORT CARSON FORT CARSON FORT CARSON FORT CARSON FORT CARSON FORT CARSON FORT CARSON PETERSON AFB PETERSON AFB PETERSON AFB PETERSON AFB PETERSON AFB PETERSON AFB PETERSON AFB PETERSON AFB PETERSON AFB US AIR FORCE ACADEMY US AIR FORCE ACADEMY US AIR FORCE ACADEMY US AIR FORCE ACADEMY US AIR FORCE ACADEMY US AIR FORCE ACADEMY US AIR FORCE ACADEMY US AIR FORCE ACADEMY US AIR FORCE ACADEMY CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE MOUNTAIN AFB MOUNTAIN AFB MOUNTAIN AFB MOUNTAIN AFB MOUNTAIN AFB MOUNTAIN AFB MOUNTAIN AFB MOUNTAIN AFB MOUNTAIN AFB MAGRATH AVE MAGRATH AVE MAGRATH AVE MAGRATH AVE MAGRATH AVE MAGRATH AVE MAGRATH AVE MAGRATH AVE MAGRATH AVE CHIL ES AVE CHIL ES AVE CHIL ES AVE CHIL ES AVE CHIL ES AVE CHIL ES AVE CHIL ES AVE CHIL ES AVE CHIL ES AVE US HWY 87 BUS US HWY 87 BUS US HWY 87 BUS US HWY 87 BUS US HWY 87 BUS US HWY 87 BUS US HWY 87 BUS US HWY 87 BUS US HWY 87 BUS MARKSHEFFEL RD MARKSHEFFEL RD MARKSHEFFEL RD MARKSHEFFEL RD MARKSHEFFEL RD MARKSHEFFEL RD MARKSHEFFEL RD MARKSHEFFEL RD MARKSHEFFEL RD STATE HWY 94 STATE HWY 94 STATE HWY 94 STATE HWY 94 STATE HWY 94 STATE HWY 94 STATE HWY 94 STATE HWY 94 STATE HWY 94 PETERS O N R D PETERS O N R D PETERS O N R D PETERS O N R D PETERS O N R D PETERS O N R D PETERS O N R D PETERS O N R D PETERS O N R D RESEARCH PKWY RESEARCH PKWY RESEARCH PKWY RESEARCH PKWY RESEARCH PKWY RESEARCH PKWY RESEARCH PKWY RESEARCH PKWY RESEARCH PKWY RAN GEWOOD DR RAN GEWOOD DR RAN GEWOOD DR RAN GEWOOD DR RAN GEWOOD DR RAN GEWOOD DR RAN GEWOOD DR RAN GEWOOD DR RAN GEWOOD DR POWERS BLVD POWERS BLVD POWERS BLVD POWERS BLVD POWERS BLVD POWERS BLVD POWERS BLVD POWERS BLVD POWERS BLVD WOODMEN RD WOODMEN RD WOODMEN RD WOODMEN RD WOODMEN RD WOODMEN RD WOODMEN RD WOODMEN RD WOODMEN RD M U R R A Y B L V D M U R R A Y B L V D M U R R A Y B L V D M U R R A Y B L V D M U R R A Y B L V D M U R R A Y B L V D M U R R A Y B L V D M U R R A Y B L V D M U R R A Y B L V D CAREFREE CIR CAREFREE CIR CAREFREE CIR CAREFREE CIR CAREFREE CIR CAREFREE CIR CAREFREE CIR CAREFREE CIR CAREFREE CIR PLATTE AVE PLATTE AVE PLATTE AVE PLATTE AVE PLATTE AVE PLATTE AVE PLATTE AVE PLATTE AVE PLATTE AVE CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE C I R C L E D R C IR C L E D R C I R C L E D R C I R C L E D R C I R C L E D R C I R C L E D R C IR C L E D R C I R C L E D R C I R C L E D R GALLEY RD GALLEY RD GALLEY RD GALLEY RD GALLEY RD GALLEY RD GALLEY RD GALLEY RD GALLEY RD CHELTON RD CHELTON RD CHELTON RD CHELTON RD CHELTON RD CHELTON RD CHELTON RD CHELTON RD CHELTON RD UNION BLVD UNION BLVD UNION BLVD UNION BLVD UNION BLVD UNION BLVD UNION BLVD UNION BLVD UNION BLVD GARDEN OF THE GODS RD GARDEN OF THE GODS RD GARDEN OF THE GODS RD GARDEN OF THE GODS RD GARDEN OF THE GODS RD GARDEN OF THE GODS RD GARDEN OF THE GODS RD GARDEN OF THE GODS RD GARDEN OF THE GODS RD N E V AD A AV E N E V AD A AV E N E V AD A AV E N E V AD A AV E N E V AD A AV E N E V AD A AV E N E V AD A AV E N E V AD A AV E N E V AD A AV E C AS C AD E AV E C AS C AD E AV E C AS C AD E AV E C AS C AD E AV E C AS C AD E AV E C AS C AD E AV E C AS C AD E AV E C AS C AD E AV E C AS C AD E AV E PIKES PEAK AVE PIKES PEAK AVE PIKES PEAK AVE PIKES PEAK AVE PIKES PEAK AVE PIKES PEAK AVE PIKES PEAK AVE PIKES PEAK AVE PIKES PEAK AVE FOUNTAIN BLVD FOUNTAIN BLVD FOUNTAIN BLVD FOUNTAIN BLVD FOUNTAIN BLVD FOUNTAIN BLVD FOUNTAIN BLVD FOUNTAIN BLVD FOUNTAIN BLVD HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY COLORADO AVE COLORADO AVE COLORADO AVE COLORADO AVE COLORADO AVE COLORADO AVE COLORADO AVE COLORADO AVE COLORADO AVE AIRPORT RD AIRPORT RD AIRPORT RD AIRPORT RD AIRPORT RD AIRPORT RD AIRPORT RD AIRPORT RD AIRPORT RD LAKE AVE LAKE AVE LAKE AVE LAKE AVE LAKE AVE LAKE AVE LAKE AVE LAKE AVE LAKE AVE FILLMORE ST FILLMORE ST FILLMORE ST FILLMORE ST FILLMORE ST FILLMORE ST FILLMORE ST FILLMORE ST FILLMORE ST MESA RD MESA RD MESA RD MESA RD MESA RD MESA RD MESA RD MESA RD MESA RD DRENNAN RD DRENNAN RD DRENNAN RD DRENNAN RD DRENNAN RD DRENNAN RD DRENNAN RD DRENNAN RD DRENNAN RD CHEYENNE BLVD CHEYENNE BLVD CHEYENNE BLVD CHEYENNE BLVD CHEYENNE BLVD CHEYENNE BLVD CHEYENNE BLVD CHEYENNE BLVD CHEYENNE BLVD HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY HANCOCK EXPY CRESTA RD CRESTA RD CRESTA RD CRESTA RD CRESTA RD CRESTA RD CRESTA RD CRESTA RD CRESTA RD AUSTIN BLUFFS PKWY AUSTIN BLUFFS PKWY AUSTIN BLUFFS PKWY AUSTIN BLUFFS PKWY AUSTIN BLUFFS PKWY AUSTIN BLUFFS PKWY AUSTIN BLUFFS PKWY AUSTIN BLUFFS PKWY AUSTIN BLUFFS PKWY S T A T E H W Y 1 1 5 S T A T E H W Y 1 1 5 S T A T E H W Y 1 1 5 S T A T E H W Y 1 1 5 S T A T E H W Y 1 1 5 S T A T E H W Y 1 1 5 S T A T E H W Y 1 1 5 S T A T E H W Y 1 1 5 S T A T E H W Y 1 1 5 A C A D E M Y B L V D A C A D E M Y B L V D A C A D E M Y B L V D A C A D E M Y B L V D A C A D E M Y B L V D A C A D E M Y B L V D A C A D E M Y B L V D A C A D E M Y B L V D A C A D E M Y B L V D BROADMOOR BROADMOOR BROADMOOR BROADMOOR BROADMOOR BROADMOOR BROADMOOR BROADMOOR BROADMOOR 24 83 25 CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT 24 0 1 M i l e s M i l e s M i l e s M i l e s 2 Northeast Northeast Northeast Northeast Northeast Northeast Northeast Northeast Northeast North I-25 North I-25 North I-25 North I-25 North I-25 North I-25 North I-25 North I-25 North I-25 CBD CBD CBD CBD CBD CBD CBD CBD CBD Fringe Fringe Fringe Fringe Fringe Fringe Fringe Fringe Fringe Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southeast Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest Southwest CBD CBD CBD CBD CBD CBD CBD CBD CBD COLORADO SPRINGS OFFICE SUBMARKET MAP TOP COLORADO SPRINGS LEASE AND SALES TRANSACTIONS Size (Sq. Ft.) Tenant/Building Address Sale / Lease 8,288 Land Properties Building 225 E. Cheyenne Mtn. Blvd. Sale 7,658 Boecore, Inc. 90 S. Cascade Ave. Lease 85,000 Northcare at St. Francis 6071 E. Woodmen Rd. Sale OFFICE INDUSTRIAL RETAIL The Colorado Springs office market totals 28 million square feet at year end 2010. Little product has been constructed during the pre- vious twelve months due to the job market having stalled and contracted as a result of the past three year economic recession. The unoccupied segment of the office market appears to have bottomed out. The cur- rent vacancy rate is 17.49%, a nominal increase statistically, about 50 basis points, from year end 2009. It is antici- pated that a decline in vacancy will occur in 2011 in the Class A submarkets (North I-25, Central Business District and Southeast). Currently the entire office market has 4.8 million square feet of unoccupied space and will require approxi- mately 17,000 new jobs to reach stabilized occupancy of 90%. The largest office submarkets in Colorado Springs are, in descending order: North I-25 (12 million square feet); Southeast (4.3 mil- lion square feet); Central Business District (“CBD”) (3.4 million square feet). The CBD at year-end stands at 12.33% vacancy and the Southeast/Airport is approx- imately 22% vacant. The Southeast market is dependent on Department of Defense (“DOD”) users, and federal dollars to expand contracts with these com- panies has been limited due to the wars in Iraq and Afghanistan. The North I-25 submarket is the most rep- resentative snapshot regard- ing the local economy, and the projection made last year about this submarket return- ing to positive absorption by the third quarter 2010 did occur. Building sales on office product remain well below traditional sales levels of approximate- ly 90 buildings per year with only 35 proper- ties sold in 2010. Most of these purchases were owner/user acquisitions (20 purchases). However, investment sales should return to the market as the economy improves. ...the entire office market has 4.8 million square feet of unoccupied space and will require approximately 17,000 new jobs to reach stabilized occupancy of 90% QUICK STATS Vacancy 17.49% Lease Rates $11.56 Net Absorption 422,269 Lease Activity 1,184,309 Change from last Current Year Qtr. HOT TOPICS • Voters in Colorado Springs pass Issue 300, known as the "Strong mayor ini- tiative". The change to the city char- ter will now allow for a full time mayor with broader power than pre- viouly. The first "strong mayor" will be elected in April. • The $55 million Milton E.Proby Parkway extension began construc- tion in November. When completed, the project will provide better east- west access in the southeastern part of the city by relocating traffic from Drennan Rd. • Colorado Springs ranks #6 on Forbes Magazine's "Top Ten Housing Mar- kets for Investors". The city ranked well in factors such as population growth, healthy job market, diverse economy, and low home prices. OFFICE CONSTRUCTION IN EL PASO COUNTY 8,000 U.S. Government 9362 Grand Cordera Pkwy. Lease
Transcript of Q4 DEFINITION OF TERMS MarketView 2010: Q4
Q4MarketView 2010:Colorado Springs
Q4 MarketView 2010: Colorado Springs
O F F I C E I N D U S T R I A L R E T A I L
DEFINITION OF TERMSAverage Asking Lease Rate Rate determined by multiplying the asking net lease rate for each building by its avail-able space, summing the products, then dividing by the sum of the available space with net leases for all buildings in the sum-mary.
Net Leases Includes all lease types whereby the ten-ant pays an agreed rent plus most, or all, of the operating expenses and taxes for the property, including utilities, insurance and/or maintenance expenses.
Market Coverage Includes all competitive office buildings 5,000 square feet and greater in size.
Net Absorption The change in occupied square feet from one period to the next.
Net Rentable Area The gross building square footage minus the elevator core, flues, pipe shafts, vertical ducts, balconies, and stairwell areas.
Occupied Square Feet Building area not considered vacant.
Under Construction Buildings which have begun construction as evidenced by site excavation or foundation work.
Available Square Feet Available Building Area which is either physically vacant or unoccupied, including sublease space.
Availability Rate Available Square Feet divided by the Net Rentable Area. This calculation includes vacant and sublease space and is given as a percentage.
Vacant Square Feet Existing Building Area which is physically vacant or immediately available and does not include sublease space.
Vacancy Rate Vacant Building Feet divided by the Net Rentable Area. This calculation is given as a percentage and includes vacant space but does not include sublease space.
Normalization Due to a reclassification of the market, the base, number and square footage of build-ings of previous quarters have been adjusted to match the current base. Availability and Vacancy figures for those buildings have been adjusted in previous quarters.
SIERRA COMMERCIAL REAL ESTATE, INC. 102 S. Tejon, Suite 750, Colorado Springs, Colorado 80903 T. 719.955.2000 • F. 719.955.2019
For more information regarding the MarketView, please contact one of the office brokers listed.
Sierra Commercial Real Estate, Inc. 102 S. Tejon, Suite 750 Colorado Springs, Colorado 80903 T. 719.955.2000 F. 719.955.2019
www.sierracre.comwww.sierracre.com
© Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by Sierra Commercial Real Estate, Inc. clients, and cannot be reproduced without prior written permission of Sierra Commercial Real Estate, Inc.
Kenton R. Mau, Senior Managing Director 719.955.2013 [email protected]
Randy Miller, Managing Director719.955.2015 [email protected]
Brian Wagner, Managing Director719.955.2016 [email protected]
Lonnie Wagner, Managing Director719.955.2031 [email protected]
Mark G. O'Donnell, Jr., Director719.955-2017 [email protected]
Nicola Myers-Murty, Broker Associate719.955.2021 [email protected]
OFFICE BROKERAGE SERVICES:
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FORT CARSONFORT CARSONFORT CARSONFORT CARSONFORT CARSONFORT CARSONFORT CARSONFORT CARSONFORT CARSON
PETERSON AFBPETERSON AFBPETERSON AFBPETERSON AFBPETERSON AFBPETERSON AFBPETERSON AFBPETERSON AFBPETERSON AFB
US AIR FORCE ACADEMYUS AIR FORCE ACADEMYUS AIR FORCE ACADEMYUS AIR FORCE ACADEMYUS AIR FORCE ACADEMYUS AIR FORCE ACADEMYUS AIR FORCE ACADEMYUS AIR FORCE ACADEMYUS AIR FORCE ACADEMY
CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE CHEYENNE MOUNTAIN AFBMOUNTAIN AFBMOUNTAIN AFBMOUNTAIN AFBMOUNTAIN AFBMOUNTAIN AFBMOUNTAIN AFBMOUNTAIN AFBMOUNTAIN AFB
MAGRATH AVE
MAGRATH AVE
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CHILES AVE
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CHILES AVECHILES AVE
CHILES AVECHILES AVE
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US HWY 87 BUS
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STATE HWY 94STATE HWY 94STATE HWY 94STATE HWY 94STATE HWY 94STATE HWY 94STATE HWY 94STATE HWY 94STATE HWY 94
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PETERSON
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RESEARCH PKWYRESEARCH PKWYRESEARCH PKWYRESEARCH PKWYRESEARCH PKWYRESEARCH PKWYRESEARCH PKWYRESEARCH PKWYRESEARCH PKWY
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WOODMEN RDWOODMEN RDWOODMEN RDWOODMEN RDWOODMEN RDWOODMEN RDWOODMEN RDWOODMEN RDWOODMEN RD
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CAREFREE CIRCAREFREE CIRCAREFREE CIRCAREFREE CIRCAREFREE CIRCAREFREE CIRCAREFREE CIRCAREFREE CIRCAREFREE CIR
PLATTE AVEPLATTE AVEPLATTE AVEPLATTE AVEPLATTE AVEPLATTE AVEPLATTE AVEPLATTE AVEPLATTE AVE
CONSTITUTION AVECONSTITUTION AVECONSTITUTION AVECONSTITUTION AVECONSTITUTION AVECONSTITUTION AVECONSTITUTION AVECONSTITUTION AVECONSTITUTION AVE
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GARDEN OF THE GODS RDGARDEN OF THE GODS RDGARDEN OF THE GODS RDGARDEN OF THE GODS RDGARDEN OF THE GODS RDGARDEN OF THE GODS RDGARDEN OF THE GODS RDGARDEN OF THE GODS RDGARDEN OF THE GODS RD
NEVADA AVE
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PIKES PEAK AVEPIKES PEAK AVEPIKES PEAK AVEPIKES PEAK AVEPIKES PEAK AVEPIKES PEAK AVEPIKES PEAK AVEPIKES PEAK AVEPIKES PEAK AVE
FOUNTAIN BLVDFOUNTAIN BLVDFOUNTAIN BLVDFOUNTAIN BLVDFOUNTAIN BLVDFOUNTAIN BLVDFOUNTAIN BLVDFOUNTAIN BLVDFOUNTAIN BLVDHANCOCK EXPY
HANCOCK EXPY
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COLORADO AVE
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AIRPORT RDAIRPORT RDAIRPORT RDAIRPORT RDAIRPORT RDAIRPORT RDAIRPORT RDAIRPORT RDAIRPORT RD
LAKE AVELAKE AVELAKE AVELAKE AVELAKE AVELAKE AVELAKE AVELAKE AVELAKE AVE
FILLMORE STFILLMORE STFILLMORE STFILLMORE STFILLMORE STFILLMORE STFILLMORE STFILLMORE STFILLMORE ST
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DRENNAN RDDRENNAN RDDRENNAN RDDRENNAN RDDRENNAN RDDRENNAN RDDRENNAN RDDRENNAN RDDRENNAN RD
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CRESTA RDCRESTA RDCRESTA RDCRESTA RDCRESTA RDCRESTA RDCRESTA RDCRESTA RDCRESTA RD
AUSTIN BLUFFS PKWYAUSTIN BLUFFS PKWYAUSTIN BLUFFS PKWYAUSTIN BLUFFS PKWYAUSTIN BLUFFS PKWYAUSTIN BLUFFS PKWYAUSTIN BLUFFS PKWYAUSTIN BLUFFS PKWYAUSTIN BLUFFS PKWY
STATE HW
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CITY OF COLORADO SPRINGS AIRPORTCITY OF COLORADO SPRINGS AIRPORTCITY OF COLORADO SPRINGS AIRPORTCITY OF COLORADO SPRINGS AIRPORTCITY OF COLORADO SPRINGS AIRPORTCITY OF COLORADO SPRINGS AIRPORTCITY OF COLORADO SPRINGS AIRPORTCITY OF COLORADO SPRINGS AIRPORTCITY OF COLORADO SPRINGS AIRPORT
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M i l e sM i l e sM i l e sM i l e s
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Northeast Northeast Northeast Northeast Northeast Northeast Northeast Northeast Northeast
North I-25North I-25North I-25North I-25North I-25North I-25North I-25North I-25North I-25
CBDCBDCBDCBDCBDCBDCBDCBDCBDFringeFringeFringeFringeFringeFringeFringeFringeFringe
SoutheastSoutheastSoutheastSoutheastSoutheastSoutheastSoutheastSoutheastSoutheastSouthwestSouthwestSouthwestSouthwestSouthwestSouthwestSouthwestSouthwestSouthwest
CBDCBDCBDCBDCBDCBDCBDCBDCBD
COLORADO SPRINGS OFFICE SUBMARKET MAP
TOP COLORADO SPRINGS LEASE AND SALES TRANSACTIONSSize (Sq. Ft.) Tenant/Building Address Sale / Lease
8,288 Land Properties Building 225 E. Cheyenne Mtn. Blvd. Sale
7,658 Boecore, Inc. 90 S. Cascade Ave. Lease
85,000 Northcare at St. Francis 6071 E. Woodmen Rd. Sale
O F F I C E I N D U S T R I A L R E T A I L
The Colorado Springs office market totals 28 million square feet at year end 2010. Little product has been constructed during the pre-vious twelve months due to the job market having stalled and contracted as a result of the past three year economic recession.
The unoccupied segment of the office market appears to have bottomed out. The cur-rent vacancy rate is 17.49%, a nominal increase statistically, about 50 basis points, from year end 2009. It is antici-pated that a decline in vacancy will occur in 2011 in the Class A submarkets (North I-25, Central Business District and Southeast). Currently the entire office market has 4.8 million square feet of unoccupied space and will require approxi-mately 17,000 new jobs to reach stabilized occupancy of 90%.
The largest office submarkets in Colorado Springs are, in descending order: North I-25 (12 million square feet); Southeast (4.3 mil-lion square feet); Central Business District
(“CBD”) (3.4 million square feet).
The CBD at year-end stands at 12.33% vacancy and the Southeast/Airport is approx-imately 22% vacant. The Southeast market is dependent on Department of Defense (“DOD”) users, and federal dollars to expand
contracts with these com-panies has been limited due to the wars in Iraq and Afghanistan. The North I-25 submarket is the most rep-resentative snapshot regard-ing the local economy, and the projection made last year about this submarket return-
ing to positive absorption by the third quarter 2010 did occur.
Building sales on office product remain well below traditional sales levels of approximate-ly 90 buildings per year with only 35 proper-ties sold in 2010. Most of these purchases were owner/user acquisitions (20 purchases). However, investment sales should return to the market as the economy improves.
...the entire office market has 4.8 million square feet of unoccupied space and
will require approximately 17,000 new jobs to reach
stabilized occupancy of 90%QUICK STATS
Vacancy 17.49%
Lease Rates $11.56
Net Absorption 422,269
Lease Activity 1,184,309
Change from lastCurrent Year Qtr.
HOT TOPICS• Voters in Colorado Springs pass Issue 300, known as the "Strong mayor ini- tiative". The change to the city char- ter will now allow for a full time mayor with broader power than pre- viouly. The first "strong mayor" will be elected in April.
• The $55 million Milton E.Proby Parkway extension began construc- tion in November. When completed, the project will provide better east- west access in the southeastern part of the city by relocating traffic from Drennan Rd.
• Colorado Springs ranks #6 on Forbes Magazine's "Top Ten Housing Mar- kets for Investors". The city ranked well in factors such as population growth, healthy job market, diverse economy, and low home prices.
OFFICE CONSTRUCTION IN EL PASO COUNTY
8,000 U.S. Government 9362 Grand Cordera Pkwy. Lease
Q4 MarketView 2010: Colorado Springs www.sierracre.com
© 2011 Sierra Commercial Real Estate, Inc.© 2011 Sierra Commercial Real Estate, Inc.
METRO OFFICE STATISTICS
Office Submarket
YTDAbsorption
SF
YTDLeasingActivity
Net Average Asking Lease Rate $ SF/YR
Availability Rate %
Vacancy Rate %
VacantSF
Net RentableArea
CBD
Total
Southwest
Southeast
Northeast
North I-25
CBD Fringe
3,390,723 102,089176,097$13.3213.68%12.33%417,987
2,752,856 26,72884,884$10.446.46%6.26%172,261
12,194,618 372,726**533,680$12.7521.05%20.80%2,536,571*
3,455,281 (22,713)162,611$10.0914.61%14.50%501,071
4,329,409 (22,965)163,604$9.1122.10%22.07%955,674
1,725,731 (33,596)63,433$9.8116.61%16.61%286,701
27,848,618 422,269**1,184,309$11.5617.80%17.49%4,870,265
Vacancy rates during 2010 have risen from year end 2009, currently at 17.49%. Lease rates have declined in 2009 and 2010, currently at $11.56/SF/NNN.
Lease Rates $11.56Vacancy 17.49%
The unemployment rate in El Paso County has risen since 2007 to a current rate of 9.4%. Unemployment rates both locally and nationally have been increasing steadily since 2006.
United States 9.8%Colorado 8.6%El Paso County 9.4%
CLASS “A” OFFICE STATISTICS
Office Submarket
YTDAbsorption
SF
YTDLeasingActivity
Net Average Asking Lease Rate $ SF/YR
Vacancy Rate %
VacantSF
Net RentableArea
CBD
Total
Southeast
North I-25 5,107,572 277,485*285,158$12.8029.89%1,526,765
1,791,741 5,73645,431$15.4110.90%195,268
1,429,857 33,27781,438$13.4330.65%438,291
8,329,170 412,027$13.1625.94%2,160,324 316,498*
MARKET OUTLOOK FOR 2011Overall there is cautious optimism for 2011 although the road back will require a long period of reconstruction. Several recent announcements by companies to expand in or move to Colorado Springs will bring modest absorption gains to the office market during the year. The investment market remains hampered by a relatively weak lending environment and it will affect institutional investors and their ability to acquire assets for the remainder of 2011.
Absorption in the Class “A” market was 316,498 square feet during 2010, reversing a trend of declining absorption that began in 2006.
Class “A” vacancy rates have decreased since the end of 2009, currently at 25.94%. Rental rates have begun to increase during the second half of 2010 to a current rate of $13.16/SF/NNN.
Annual Absorption 316,498 Annual Vacancy 25.94%
0%
2%
4%
6%
8%
10%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010$8
$9
$10
$11
$12
$13
$14
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
* Over 500,000 SF of vacant office space at the former Intel facility on Garden of the Gods Rd. (Corporate Ridge) was reintroduced to the office statistics during the first quarter of 2010** The sale of the 289,255 SF facility at 1675 Garden of the Gods Rd. to El Paso County is reflected in absorption, but not leasing activity.
CLASS "A" ABSORPTION CLASS "A" VACANCY
UNEMPLOYMENTMETRO VACANCY/LEASE RATES
* The sale of the 289,255 SF facility at 1675 Garden of the Gods Rd. to El Paso County is reflected in absorption, but not leasing activity.
