If local commercial real estate vacancy rates climb this year, the reason probably will be 1.4 million square feet of newly constructed space coming on the market and not necessarily because of a surge of businesses closing up shop.
That’s part of this year’s commercial real estate outlook as seen by Paul Turner, whose Turner Commercial Research tracks the Colorado Springs market. Turner’s comments are included in his look back at the fourth quarter of 2007 and his look ahead at 2008.
Unlike last year, when chip-maker Intel Corp. announced it would close its Springs plant, there are no “major rumors” of impending business shutdowns that might chill the commercial market, Turner said. But, he said, a national economic downturn — higher unemployment, reduced manufacturing and a slowdown in retail spending — could affect Springs commercial real estate.
Also, it’s too early to predict what will happen to commercial rents this year, Turner said.
Looking back, Turner said the combined commercial vacancy rate for offices, industrial buildings and shopping centers finished 2007 at 8.2 percent; at the end of 2006, the combined vacancy rate was 6.6 percent.
Outside investors spent about $600 million acquiring commercial real estate in the Springs in 2007 — a solid year, but still well below the $1 billion spent in 2006, Turner estimated.