April 9, 2014 Updated: April 9, 2014 at 3:15 pm
Colorado Springs' commercial real estate market showed slight gains during the first quarter, but it hasn't fully recovered from the recession, according to a report by Turner Commercial Research.
"We're still bouncing along," Paul Turner, president of the research firm, said Wednesday.
Turner's report, which tracks key sectors of the commercial market, showed the combined vacancy rate for offices, shopping centers and industrial buildings at 11.1 percent in the first quarter of 2014. That's unchanged from the fourth quarter of last year, but down from 11.5 percent for the first quarter of last year.
It's also the lowest combined rate in five years. By comparison, combined vacancy rates were in the single digits before the recession - and were as low as 6.7 percent in 2006.
Combined asking rents averaged $9.74 per square foot in the first quarter, down six cents from the end of 2013, but up a dime from a year ago, Turner's report showed. Rents had been over $10 per square foot five years ago.
While the market has shown some signs of life, it isn't making significant strides, Turner said. Employers aren't adding large numbers of high-paying positions, and aren't leasing large amounts of commercial space. That means vacancy rates will remain relatively high and rents won't show big increases.
"It's just low-level jobs," Turner said of local job growth. "We're not getting the type of industry that will generate the $50,000- and $60,000-a-year jobs you need to survive in this town."
For individual sectors of the commercial market, Turner's report showed:
- The first-quarter office vacancy rate was 13.2 percent, up from 12.8 percent in the fourth quarter of last year. Average asking rents of $10.13 per square foot in the first quarter were up a penny from the end of last year.
- The vacancy rate for Class A offices, or top-of-the-line space, shot up to a record high of 22.6 percent in the first quarter; it had been 20 percent in the fourth quarter of last year. Asking rents for Class A office space were $13.23 per square foot in the first quarter, down a nickel from the end of 2013.
- The shopping center vacancy rate of 11.5 percent in the first quarter fell slightly from 11.7 percent in the fourth quarter of last year. Rents averaged $12.57 per square foot, down from $12.80 in the fourth quarter of 2013.
- Industrial building vacancies dipped to 9 percent in the first quarter from 9.3 percent at the end of 2013. Rents of $6.51 per square foot in the first quarter rose slightly from $6.48 in the fourth quarter.
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