If you're a small business owner in Colorado Springs thinking about leasing or buying commercial space, you're not alone. The local commercial real estate market is in a dynamic phase—shaped by high interest rates, construction slowdowns, and evolving tenant needs. Whether you're opening your first shop or relocating your growing business, understanding current trends can help you make a smart move.
Here’s what you need to know about the retail, office, and industrial markets right now—and what to expect over the next 12 months.
🛍️ Retail: Low Vacancy, Steady Demand
Retail space in Colorado Springs is in high demand, with vacancy hovering around 5.2%—the lowest it’s been in years. Lease rates have climbed steadily, now averaging $21/SF NNN, and competition for well-located spaces is heating up.
What This Means for You:
- Act fast if you find a space in a high-traffic area.
- National tenants are expanding again—so attractive spaces may lease quickly.
- Look for mixed-use centers or locations near new housing for built-in foot traffic.
- Landlords may still offer tenant improvement (TI) allowances, but rent concessions are limited.
✅ Ideal for businesses ready to move quickly and budget for moderate rent growth.
🏢 Office: Stabilizing with Opportunity
The office sector is still finding its footing after the hybrid work shift. Vacancy rates are around 12.8%, higher than pre-COVID but improving as government and tech-adjacent tenants absorb Class A space.
What This Means for You:
- It's a tenant-friendly market, especially in older buildings.
- Landlords are offering flexible lease terms, free rent, and custom build-outs.
- If you’re in professional services, it’s a great time to upgrade or negotiate better space.
⚠️ Watch out for outdated or poorly located Class B/C spaces—they may remain vacant longer and offer fewer long-term benefits.
✅ Best for service-based businesses, therapists, or consultants looking for value.
🏭 Industrial: Tight Supply, High Demand
Industrial remains the top-performing sector. Vacancy is low (around 4.1–4.6%) and lease rates are strong at $11–12/SF NNN. Limited new construction means demand is outpacing supply.
What This Means for You:
- If you need warehouse, flex, or light manufacturing space, be ready to move quickly.
- Many deals are going to cash buyers or pre-leased tenants.
- Landlords have leverage—expect fewer concessions and limited availability.
✅ Perfect for trade businesses, logistics, or production-focused operations needing reliable space now.
💰 Economic Pressures: What’s Affecting the Market?
Several macroeconomic forces are shaping decision-making for business owners:
- High interest rates are slowing property purchases and speculative development.
- Construction costs and labor shortages are driving up build-out pricing.
- Consumer spending is more cautious, especially in discretionary retail.
- Office tenants are downsizing, creating opportunity for those who remain.
- Industrial tenants continue to expand but face limited choices.
Bottom line? It’s a strategic market—not a time to rush, but not a time to wait too long either.
📅 The 12-Month Outlook: What to Expect in 2026
Retail: Rents will grow slowly; demand stays strong; location is key.
Office: Stabilizing; more concessions; good time to upgrade.
Industrial: Low vacancy; rents rising; limited new inventory.
🧠 Key Takeaways for Small Business Owners
- Plan early. Quality spaces are going fast—especially in retail and industrial.
- Negotiate smart. In the office sector, tenants hold leverage; ask for free rent, shorter terms, or upgrades.
- Know your numbers. Keep rent below 10% of your gross revenue (or 5–7% for office, 2–6% for industrial).
- Be flexible. You might get a better deal slightly outside your original target area.
🌟 Final Thought
The Colorado Springs commercial real estate market in 2025–2026 offers opportunity with caution. If you understand the market conditions, align them with your business goals, and negotiate wisely, you'll be well-positioned to thrive in your next space.
Whether you're opening your first brick-and-mortar location or expanding your operation, knowledge is your best negotiating tool.
