Colorado Springs recovery depends on more jobs

The commercial real estate market in Colorado Springs is improving.

A 2014 forecast shows that the commercial real estate recovery in Colorado Springs, Colo., will only continue if the area increases the number of jobs. Brokerage Sierra Commercial Real Estate said a number of factors point to a recovery, including lower vacancy rates, so if more jobs come to the area, the recovery would be even more likely.

"That's the critical element in improvement in 2014," Sierra President Dave Delich said to The Gazette. "We need to have jobs come into the marketplace, both internal growth and external relocation into the market, in order for this area to become healthier as we go through '14."

A good sign for the recovery is that Colorado Springs unemployment dropped to a nearly five-year low in October to 8.1 percent. Decreasing unemployment would lead to increased demand for commercial real estate as more companies move to the area or existing businesses expand. That would allow property managers to raise rents.

Sierra's forecast comes on the heels of one released last week from Quantum Commercial Group, which also displayed optimism for 2014's commercial performance. A major factor in the improvement is out-of-town investors who have made some major office purchases in Colorado Springs, The Gazette reported.

One such investment was the $18.7 million acquisition of the Price Center office complex in the Briargate Business Campus.

"New capital coming into Colorado Springs is always exciting when we look at office buildings," Sierra's Mark O'Donnell said to the newspaper.

Parts of the city's retail market is seeing varying degrees of success, according to the report. The data shows that anchored shopping centers built before 1994 have a vacancy rate of about 19 percent while such centers built more recently have a rate of just 2.5 percent.

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