Q2 2020 | COLORADO SPRINGS

QUARTERLY COMMERCIAL MARKET OVERVIEW

NavPoint Real Estate Group | 720.420.7530 | www.navpointre.com

Q2 2020 | COLORADO SPRINGS

MARKET OVERVIEW

$16.93Rental Rate

RETAIL

5.4% Vacancy Rate

APARTMENT

$1.32Rental Rate

7.4% Vacancy Rate

Q2 2020 STATS

$21.22Rental Rate

OFFICE

7.9% Vacancy Rate

$8.88Rental Rate

INDUSTRIAL & FLEX

5.4% Vacancy Rate

Our team of professionals have a broad understanding of the national commercial real estate market while also providing acute local knowledge. If you are looking for specific information on the local commercial real estate market, contact anyone on our brokerage services team for assistance.

As Colorado slowly reopens its economy, all eyes will be on the reclamation of jobs this quarter to determine the shape of the recovery. The recent national May employment data surprised to the upside, and could bode well for Colorado, which outperformed the national benchmark in April.

Employment growth in Colorado Springs outperformed the national benchmark for a seventh straight year in 2019. And at the end of Q4 2019 jobs in the metro area were growing at nearly twice the rate of the national average. Professional and Business Services, Education and Health Services, and Natural Resources, Mining and Construction were the fastest growing industries for jobs.

Colorado Springs’ population growth was about 1.3% in 2019, down from roughly 2% gains from 2016-2011. From 2011-2015, the population grew in the 1.2% to 1.5% range.

Voted the Most Desirable Place to Live by U.S. News & World Report in 2018 and 2019, Colorado Springs is home to a diverse population that is growing rapidly. Considered the affordable alternative to Denver; Colorado Springs grew 11% from 2010 to 2017 to more than 467,000 residents. According to the Federal Housing Finance Agency, housing prices did not grow at a 5% rate until 2015, whereas they were growing at a 10% annual rate in Boulder and Denver by 2013. However, prices have surged in Colorado Springs lately – annual price growth was around 10% in 2017-2018, and 2019 is likely to post robust gains.

Average asking apartment rents are a sizable discount – more than 30% - from those in Denver, and Boulder, and 20% below the national average.

Additionally, Colorado Springs continues to be a hub for aerospace & defense, information technology, healthcare & medical technologies, and manufacturing. With a strong economic base; home to the US Air Force Academy, Peterson and Schriever Air Force Bases and the US Army’s Fort Carson, the area is attracting a lot of attention from developers. While most of the development has been focused on the northern edge, the southside of Colorado Springs has been making the news with several mixed-use projects planned or underway. This trend highlights an organic growth for Colorado Springs that is less focused on Denver and its suburbs.

Source: CoStar 2020

Q2 2020 | COLORADO SPRINGS

MARKET OVERVIEWApartment Lease Rates

Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Colorado Springs $1.28 $1.30 $1.34 $1.01 $1.33 $1.37 $1.32Denver $1.68 $1.71 $1.74 $1.72 $1.72 $1.74 $1.73

Apartment VacancyQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Colorado Springs 6.5% 6.3% 6.3% 6.1% 7.1% 7.6% 7.4%Denver 6.9% 6.8% 6.6% 6.7% 7.4% 7.9% 7.8%

Q2 2020 | COLORADO SPRINGS

MARKET OVERVIEWRetail Lease Rates

Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Colorado Springs $13.72 $13.76 $14.21 $14.37 $16.96 $17.23 $16.93Denver $18.65 $18.68 $18.65 $18.12 $22.82 $23.07 $22.78

Retail VacancyQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Colorado Springs 4.6% 4.6% 4.5% 4.9% 4.7% 4.9% 5.4%Denver 4.1% 4.4% 4.4% 4.4% 4.5% 4.6% 5.1%

Q2 2020 | COLORADO SPRINGS

MARKET OVERVIEWOffice Lease Rates

Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Colorado Springs $14.67 $14.87 $15.04 $15.48 $20.64 $21.68 $21.22Denver $23.39 $23.68 $23.84 $23.89 $27.62 $28.34 $27.66

Office VacancyQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Colorado Springs 9.5% 9.4% 8.9% 9.0% 8.3% 7.7% 7.9%Denver 10.3% 10.1% 10.1% 10.1% 10.2% 10.4% 11.3%

Q2 2020 | COLORADO SPRINGS

MARKET OVERVIEWIndustrial & Flex Lease Rates

Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Colorado Springs $8.58 $9.30 $9.53 $9.48 $8.76 $8.94 $8.88Denver $8.19 $8.42 $8.40 $8.56 $9.69 $9.99 $9.77

Industrial & Flex VacancyQ4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020

Colorado Springs 7.0% 6.3% 6.4% 6.3% 5.8% 5.3% 5.4%Denver 4.2% 4.3% 4.6% 5.2% 5.3% 5.5% 5.9%

Q2 2020 | COLORADO SPRINGS

MARKET OVERVIEW

NavPoint Real Estate Group3740 Dacoro Lane | Suite 200Castle Rock, CO 80104

720.420.7530 Office720.240.0762 Fax

www.navpointre.com

The information contained in this report was obtained from CoStar Realty Information Inc. This data is intended to only show trends in the area. All reported sales were not necessarily listed or sold by NavPoint Real Estate Group.

Brent HamBrokerage Services

NavPoint Real Estate Group is a comprehensive Commercial Real Estate Services Firm with office locations in Denver, Castle Rock and Colorado Springs, Colorado. The company specializes in acquisitions, dispositions, and leasing across all product types throughout Colorado and the Western United States. NavPoint’s team of professionals have a broad understanding of the national commercial real estate market while also providing acute local knowledge to each assignment. The firm has completed over 900 transactions and is currently involved in the exclusive brokerage of well over 2,000,000 SF of commercial real estate.

Mission StatementAt NavPoint Real Estate Group we strive to exceed the expectations of our clients by providing a clear route to success in every real estate transaction. We put people above profits and allow this philosophy to shape our success.

Vision Statement At NavPoint Real Estate Group our objective is to be known as one of the foremost experts in the business of Commercial Real Estate brokerage, property/asset management and consulting.

Matt CallPrincipal

Charlie DavisBrokerage Services

Jeff BrandonBrokerage Services

Michelle Rickman Transaction Coordinator

Holly SigdestadMarketing & Operations

Collin TedescoInvestment Analyst/Brokerage Services

Ian ElfnerBrokerage Services

Matt KulbeBrokerage Services

Gina LissAdministrative

Assistant

Emily Van Eps Marketing

Coordinator