Colorado Springs / El Paso County Q1 2025 Market Update Report
PUBLIC POLICY
While Colorado Springs relies heavily on government sectors, its concentration in missile defense and space technology has largely remained untouched by DOGE. Moreover, numerous mid-sized private enterprises engaged in government contracts are confident about continued growth and expanding opportunities in the region and beyond.
After a decade-long ban, Colorado Springs ballot measures passed the sale of recreational marijuana.
HAPPENINGS
Realtor.com named Colorado Springs the top housing market for 2025, projecting a 27.1% increase in existing home sales. The city’s scenic beauty, quality schools, and strong community appeal contribute to its housing market strength.
Indian space surveillance company, Digantara, announced a $35 million investment to establish its U.S. headquarters in Colorado Springs. The company aims to collaborate with U.S. defense agencies on space domain awareness initiatives.
COMMERCIAL REAL ESTATE
In Q1 2025, the Colorado Springs office market unfolded as expected, maintaining robust activity despite widespread national economic turbulence affecting businesses. The market recorded positive absorption of 190,000 square feet across all three submarkets, driven significantly by a major government lease deal. Leasing activity remained strong, and overall sentiment in the market reflects optimism for future growth.
The Colorado Springs industrial market showed signs of activity, with the construction pipeline for new industrial properties reaching 306,750 SF, the highest since Q1 2021. Projects like an 84,750 SF warehouse at the Colorado Aerospace Business Center (set for completion in January 2026) and a 22,000 SF warehouse off Janitell Road (due June 2025) led the way.
| 2024 YTD | 2025 YTD | %+- | |
| VELOCITY (Source – Moody’s – El Paso County Q1) | |||
| Commercial Sales Volume | $278,149,119 | $307,151,641 | +10.43% |
| Commercial Transactions | 76 | 96 | +26.32% |
| VACANCY RATE (Source – Variable; Office Sector Class A/B, Colorado Springs Q1) | 13.14% | 11.9%-9.44 | |
| CAP RATE (Variable – Download Full Report) | |||
| SALES TAX INDICATORS (Source – Coloradosprings.gov) | |||
| All Sales Tax | $17,475,796 | $17,489,581 | +.08% |
| Lodging Taxes | $479,375 | $486,873 | +1.56% |
