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olorado Springs' commercial real estate market faces challenges, including the closure of big-box stores and office workers still working from home. However, the local market remains relatively healthy compared to Denver and other major cities. Office vacancy rates are below the national average, while industrial space vacancies are less than half the national rate.

    According to Bill Craighead, director of the UCCS Economic Forum, Colorado Springs has avoided the "office vacancy apocalypse" affecting many downtowns due to its strong defense and aerospace industries. However, a recession could impact the market if businesses cut back on investments. Tatiana Bailey, executive director of Data-Driven Economic Strategies, is concerned about an economic slowdown due to escalating tariffs and federal job cuts.

    The local office market has remained stable despite some employers downsizing their space. Insurance giant Progressive put its 328,000-square-foot campus up for sale and leaseback, while Compassion International listed much of the space in a 155,000-square-foot office building for lease. Technology giant Oracle is also preparing to list nearly 100,000 square feet of space for lease.

    The industrial market slowed in both leasing and building sales, but vacancy rates remain low at 3.8%. New construction projects are underway, including three speculative industrial complexes near the Colorado Springs Airport and in Monument. Aaron Horn, senior managing director specializing in industrial space, said demand is still outstripping supply, driving construction despite high interest rates and rising costs.

    The retail market saw an increase in vacancies to 4.7%, driven by the bankruptcy of Big Lots and other retailers. However, many locations are already generating interest from potential tenants who see vacant space as an attractive alternative to new construction. Local retail vacancies were slightly higher than the national average at year's end, but non-traditional users such as VASA Fitness have been converting former retail spaces into their own locations.

    John Winsor, director of retail brokerage for Olive, said the market is stable but constantly evolving as retailers and restaurants close locations or shut down entirely. Businesses that combine shopping, entertainment, and/or food have become a fast-growing segment of the retail industry, filling the void left by declining regional malls.