First Quarter 2008 Retail Market Review

The first quarter of 2008 was steady despite national reports of declined retail spending and consumer confidence. Vacancy rates in the retail sector remained unchanged from the 4th quarter of 2007, at 7.7 percent. While this is an increase over 2006 (6.4%), this vacancy rate has been right around 7.5-8.0% over the last 8 years. Averaged asking rates for these retail properties has increased just slightly over the close of 2007, rising $.07 to $14.03. The $14.03 averaged asking rent is an all time high in Colorado Springs, but rates have increased every year since 2001.

The slow down in the economy is being seen in greater effect with regard to retail buildings that have sold over the past year. 2006 saw record highs in square footage sold (2,396,152 square feet sold) along with price per square foot ($161 per square foot). In 2007 those numbers dropped drastically, selling less than half of the 2006 number, to 1,087,205 square feet sold and the average price per square foot dropped to $132 per square foot.

All that said, in today's market, it's cheaper in many instances for owner/users to buy their building rather than to lease. Low interest rates for commercial properties are readily available, and in most cases bare out to be less expensive when compared to leasing on a price per square foot basis.

The majority of the information used in this entry is courtesy of Paul Turner, of Turner Commercial Research. We are grateful to Paul for allowing us to use his data and information in the blog. For more information on the other commercial real estate sub markets, please contact me and I will get you a copy of the TCR quarterly overview. The overview is a snapshot look at all commercial real estate segments (office, industrial, retail and land). Please call Jamie at 719-577-0044 to obtain your copy.