07.23.06
Colorado Springs Commercial Real Estate
If you consider yourself a real estate investor (current or prospective), have you thought about putting your dollars to work in the commercial real estate arena? Right now vacancy rates for commercial properties (offices, industrial buildings and shopping centers) are hovering right around 7.5%. Just a couple years ago, they were nearing 10%. There is currently ample opportunity to find qualified tenants, so investing in commercial property has a better profit margin than it did previously.
Here is the breakdown of vacancy rates and average rents in Colorado Springs:
Office building vacancy rates: 8.1%
Average office rents: $10.57 per sf
Industrial building vacancy rates: 7.3%
Average industrial rents: $7.05 per sf
Shopping center vacancy rates: 6.9%
Average shopping center rents: $13.14 per sf
Source: Turner Commercial Research
My experience helping clients to search for commercial property (whether for purchase or lease) often has me wondering why there isn’t more available inventory for certain types of properties. In fact, it is fairly common for tenants/buyers to physically change the property once they take possession because they couldn’t find something that suited them perfectly in their search.
As far as land goes, there is a limited supply so prices have been climbing steadily. With the price increases for land, commercial building investors have been motivated enough to pay top dollar for the land they purchase. This is a good sign for the economy and for future investors. Though some local commercial real estate practitioners say the current market is “nothing dramatic”. Some would say the circumstances are fairly balanced while others would say that we still have our areas of sluggish market response.
On a positive note, we’ve had more job growth in Colorado Springs, so new businesses are being developed and existing businesses have been expanding. According to Turner Commercial, retail space in particular “is experiencing extraordinary demand”.
Starting a commercial real estate portfolio can be a bit intimidating since a lot of the terminology and the practices differ from the residential arena. Selecting an experienced agent who can navigate the commercial waters for you is imperative. The possibilities are endless for this type of investment, so it’s definitely worth looking into.
