Commercial vacancies are among the lowest ever in downtown Colorado Springs — but that’s not necessarily great news.
Vacancy is at 2.8 percent in Q2 for retail, “which is incredibly low,” according to Sarah Harris, the Downtown Partnership’s director of business development and economic vitality.
“We have just over 66,000 square feet of retail space available in the central business district and nothing currently under construction, so it’s a tight market,” Harris said. “Typically we like to see vacancy rates closer to 4 to 6 percent for a healthy amount of turnover, and expect that the limited space will start to slow the number of new retailers we see over the next year until more product becomes available.”
Six years ago, the downtown vacancy rate was nearing 11 percent, according to Partnership data.
The Downtown Partnership has reported 15 new street-level businesses this year, with several more leases signed and businesses preparing to open in the next several months. Some of those are filling spots that have been vacant for years.
Planning an October opening in a unit at 117 E. Bijou St., for instance, is Cycology Studio — which will occupy space that has been available for more than five years, Harris said.
Owner Kesha Leets said her business will be the city’s first “boutique-style cycling studio” with a “club-like, high-end feel.”
Leets said she and her husband were, at first, more interested in opening to the north, closer to newer development.
“We decided that was a cop-out, seeing how we live near downtown and spend all our time downtown,” Leets said.
The cycling studio concept has taken hold in her home state of New York, and she’d like to grow it here, she said.
“We took the idea of a workout and [will] give it more of a hometown feel,” Leets said, adding the reception area will be “Colorado rustic chic and homey,” while the studio will be “dark, loud and will feel like a club.”
The 3,700-square-foot space could be subleased, she said, adding, “We’ll be looking for someone who wants to open something like a yoga studio, someone to complement that space.”
A second business will soon be announcing plans to move into 117 E. Bijou St., but it could not yet be disclosed, Harris said.
Also planning to open in October is Painting with a Twist, a franchise art and wine venue owned by Starla Steinbach, which will occupy the former Splash! space left vacant at 115 N. Tejon St. This will be Steinbach’s fifth location, and her third in Colorado Springs.
“I think Colorado Springs has a good sense of community. That’s what I really like about it,” she said. “We’re in a great location for people to come and have a good time.”
Work near Cycology Studio will also mean some respite for an under-supplied residential market downtown as new condo construction is underway. The nine residences will run in the mid-$200,000s, according to Walston Group Real Estate’s website. The builder, Dan Robertson, is responsible for the Giddings and Daniels Building lofts on Tejon Street.
BIG ONES COMING?
A resurgence of small businesses opening downtown is only the beginning. Several larger businesses are expected to eat up a chunk of the remaining vacant commercial space, Harris said.
“There are a couple of big ones coming,” she said. “We can’t make any announcements yet, but they should fill quite a bit of square footage in long-term vacancies.”
An improved economy and a consumer focus on local shops have driven downtown demand, Harris said.
“I think [the Partnership] worked really hard to recruit downtown as well,” she said. “Of the 15 new businesses, seven were very involved with Downtown Partnership staff before they opened. Some were directly recruited downtown.”
According to Nathan Landry, spokesperson for the Colorado Springs Regional Business Alliance, businesses that could potentially move to Colorado Springs indicate they want a strong downtown as a quality-of-life issue for employees.
“Every time we talk with employers about workforce needs, they touch on wanting a downtown that is active and vibrant and has relatively affordable housing,” Landry said. “Many see our downtown moving in that direction.”
Now downtown needs new retail and residential space to facilitate the demand, Harris said.
“Hopefully more retail will be constructed along Bijou and Cascade,” she said, adding that a new hotel, likely a Hilton brand, is beginning construction at that corner.
The old Giuseppe’s Depot property on Sierra Madre Street may see a tenant shortly, Harris said, but she wasn’t at liberty to offer additional details.
“We’ll have some exciting announcements in the next six months,” she said. “These will be some bigger properties — not your traditional retail.”
[su_box title=”New downtown businesses” box_color=”#005ac3″]
Red Gravy, 23 S. Tejon St. — opened in January
Podiatryst Shoe Store, 113 N. Tejon St. — opened in January
Bar-K, 124 E. Costilla St. — opened in February
Bento Box, 107 N. Tejon St. — opened in February
Cacao Chemistry, 109 N. Tejon St. — opened in February
Bonny & Read Fresh Seafood, 101 N. Tejon St. — opened in March
Ladyfingers Letterpress, 113 E. Bijou St. — opened in April
Farmers Insurance, 408 S. Nevada Ave. — opened in April
Sweetest Secret, 129½ N. Tejon St. — opened in April
Hooked on Books, 12 E. Bijou St. — opened in April
My Colorado Store, 130 N. Tejon St. — opened in April
Welcome Fellow, 616 N. Tejon St. — opened in April
T-Byrds Tacos, 26 E. Kiowa St. — opened in May
Kids on Bikes Pedal Station, 527 S. Tejon St. — opened in June
Thrift Junkie, 502 N. Tejon St. — opened in June
Loyal Coffee, 408 S. Nevada Ave. — opening in September[/su_box]