The Colorado Springs commercial real estate market has entered a period of normalization rather than free fall. Following the post‑pandemic surge, activity has cooled but remains fundamentally healthy as deals are still happening despite higher construction costs and interest rates.
Multifamily housing has reset after heavy new supply in 2024, with rents down about 7% year‑over‑year 14% from 2022 high point, and vacancies near 7%. Landlords are offering more concessions, yet with construction slowing to just 2,800 units underway, a gradual recovery in rents and occupancy is expected over the next two years.
Retail continues to outperform, characterized as “quite strong.” Vacancy sits below 5% as tenants keep expanding and consumer demand fuels absorption of new space, particularly in neighborhood centers and restaurants.
Office space remains the softest segment, with 11.6% vacancy and “negative net absorption”. However, limited new development is helping stabilize conditions as companies adapt to hybrid work patterns.