In October, I attended the 2025 Economic Forum hosted by Empire Title here in Colorado Springs. One of the keynote speakers was Dr. Ted C. Jones, Chief Economist for Stewart Title — a nationally recognized expert on real estate trends, capital markets, and economic cycles.
The presentation was full of local and statewide insights into what’s happening in our commercial real estate market, and I wanted to share some key takeaways that could impact your investments and planning as we move into 2026.
Employment: The Foundation of Market Stability
Colorado Springs continues to add jobs at a modest but healthy rate. As of April 2025:
- 2,700 net new jobs were added over the previous 12 months.
- That’s a +0.8% year-over-year increase in employment.
- Sectors like real estate, leasing, and construction have fully recovered and surpassed pre-pandemic levels.
This is an important signal. Job growth drives tenant demand, retail spending, and site selection for everything from healthcare to logistics.
CRE Sales Are Rebounding Across the State
Q3 2025 saw an uptick in commercial real estate sales volume across Colorado — totaling approximately $6.5 billion statewide. This marks a noticeable rebound from 2023 and early 2024 levels, which were subdued due to interest rate volatility and economic uncertainty.
Dr. Jones emphasized that industrial and retail assets continue to outperform in both urban and secondary markets. In Colorado Springs, we’re seeing smaller flex industrial buildings and neighborhood retail centers remain in high demand.
Cap Rates Are Expanding, But That’s Not All Bad
One of the headline stats from Ted’s talk: Cap rates have risen by 218 basis points from their recent lows.
That’s a big deal.
For owners, it may mean lower asset valuations in the short term. But for buyers and repositioning plays, it opens the door to better cash flow, improved yield, and sharper deal terms.
It also signals that capital is becoming more selective, favoring high-quality locations, stabilized tenants, and flexible use properties.
Business Tax Climate: Colorado in the Middle of the Pack
From the companion report shared during the event (the 2025 Tax Foundation Index) Colorado ranks #32 out of 50 states for overall business tax competitiveness.
Strengths:
- #10 in Corporate Tax Ranking which is excellent for entities structured as corporations or growing past startup phase.
Weaknesses:
- #36 in Property Tax Ranking
- #37 in Sales Tax Ranking
What does this mean?
While Colorado is attractive from an income and corporate tax perspective, property owners should remain aware of the long-term burden of real estate taxes, especially in metro areas with high mill levies or active reassessment cycles.
Takeaways for CRE Owners, Users, and Investors
- Expect Cap Rate Spread – If you’re selling, pricing will reflect tighter underwriting. If you’re buying, now is your window to find value.
- Focus on Jobs + Demand Drivers – Neighborhoods and corridors with job growth will outperform.
- Watch for Lease Escalations and OpEx – In this tax and interest rate climate, locking in strong leases is key.
- Stay Educated and Strategic – Forums like this one remind us how essential it is to understand both macro and micro trends.
Final Thought
This market rewards those who are patient, informed, and connected.
If you're looking at opportunities, whether that’s leasing space, buying, or selling, I’d love to share more about what I’m seeing and how it relates to your goals.
