Land Market Report • 2nd Quarter 2016
Colorado Springs, CO
Building Permit Activity
“2016 started off better than
expected and will be the best year in
the land market since 2006.”
Year
Single
Family
All
Others
Annual %
Change
(SingleFamily)
Annual %
Change
(All Types)
‘06
3,446
973
-35.2%
-34.6%
‘07
2,135
956
-38.0%
-30.1%
‘08
1,223
762
-42.7%
-35.8%
‘09
1,105
232
-9.65%
-32.6%
‘10
1,404
311
27.1%
28.3%
‘11
1,399
821
-.03%
29.4%
‘12
2,218
767
59%
34.5%
‘13
2,693
745
21.5%
15.2%
‘14
2,439
1,090
-9.4%
2.6%
‘15
2,739
2,046
12.3%
1.6%
10-Year
Avg.
2,080
740
♦ El Paso County added 8,600 jobs in 2015, which was a 3.5 %
growth rate and the most since 2001. Colorado Springs is one of
the fastest growing job markets in the State of Colorado.
Through
June ‘15
1,358
201
Through
June ‘16
1,781
567
♦ Multi-family attached residential properties (townhomes and
duplexes) have seen a resurgence during the first half of 2016.
Limited single family lot supply and increasing home prices have
created demand in these market segments from both builders
and home buyers.
31.1%
2nd Quarter Highlights
♦ Single family building permits from January to June 2016 are
31% ahead of permits pulled from the same period in 2015. It is
almost certain that El Paso County will surpass 3,000 permits in
2016 which will be the first time since 2006.
♦ Apartment rental vacancies continue to remain at less than
5% and there are over 1,200 new apartment units under
construction that will be delivered to the market in 2016 while
more out-of-state developers continue to purchase property from
downtown to north Colorado Springs for apartment projects.
50.6%
Source: El Paso County Regional Building
Department, Summit Economics, LLC, Colorado
Division of Housing and Apartment Association
of Southern Colorado
♦ Both major hospital systems in Colorado Springs announced
multi-million dollar expansions for 2017 & 2018.
The Colorado Springs/El Paso County market continues its consistent
upward trend that started in 2012. Many believe it is a sustainable growth
rate because the market never hyper-inflated, like Denver, and there have
been very few speculative transactions in the market. The area’s land market
is still considered to be one of the best values in the State of Colorado and
has been for the past 24 months. The area continues to attract new home
building companies, buyers, investors and developers into the market
because many of the large markets have become saturated and over-priced.
KEY TRANSACTIONS
Buyer
* Transaction Represented by Quantum Commercial
Seller
Property
Amount
Peakmark, LLC (local
developer)
37.35 acres on the east side of Marksheffel Boulevard, in Colorado Springs,
just south of Dublin Boulevard (planned for 141 SFR lots).
Not disclosed
*Etkin Equities (regional developer)
COPT Interquest LLC (REIT)
70 acres of commercially zoned property on the southeast corner of I-25 and
Interquest Parkway
$4,350,903
*Elite Properties of America (local builder)
Local Investment Group
7.21 acres on Lexington Drive in Briargate known as Lexington Commons
(approved for 40 duplex units).
$1,125,000
*Circle K Stores, Inc.
Moon Fountain Mesa LLC
(private owner)
2.42 acres commercially zoned property on the southeast corner of Circle
Boulevard and Monterey Road
$1,250,000
*Newport Center, LLC (local developer)
Quantum Commercial Group
101 N. Cascade Avenue, Suite 200
Colorado Springs, CO 80903
www.quantumcommercial.com
Commercial Real Estate Solutions
Prepared by:
Jack Mason
719.228.3631 • jmason@quantumcommercial.com
2016 Quantum Commercial Group Inc
Land Market Report • 2nd Quarter 2016
Colorado Springs, CO
Colorado Springs’ ease of access and proximity to the Denver and Northern Colorado markets with less expensive real estate in all market categories
make El Paso County and Colorado Springs an excellent bet.
Residential land, finished and platted lots, have continued to dominate the land market in the first 2 quarters of 2016. This is a result of increased
demand from home builders trying to keep up with consumer demand. Consumers have had to look to new home purchases because of the severe
under supply of existing homes for sale throughout the market. This trend is expected to continue and possibly accelerate in the remainder of 2016
and 2017. Additional municipality development requirements, extra time to receive entitlement approvals and lack of trades available to develop lots
and build homes will create an even tighter market for new homes and finished lots for the next couple of years. This will ultimately result in increases
in local home prices. The Springs-area market is following the same trends that occurred in the Denver market 36 months ago. Single family attached
(townhomes and duplexes) and high-density single family home construction are on the rise in 2016, because of the lack of affordable single family
lots and single family homes. Many are confident that this market will explode when there is substantial construction defects ordinance reform in the
next couple of years. This reform is being driven by the need for affordable housing along the Front Range.
Colorado Springs continues to benefit from Denver being one of the best markets in the United States. The apartment land market continued to be
strong from 2015 into 2016 with many properties going under contract for new apartment projects with out-of-state developers at market rate prices
of $6.00/sf or more. This trend is expected to continue through at 2017 because of the less than 5% vacancy rate in the County with rental rates being
over 20% less in the Colorado Springs area as compared to the Denver area markets.
The Springs-area economy has at least returned to pre-recession (2008) levels in every major category that measures the local economy. The first
half of 2016 has been consistent with continued growth in activity in the land market. The 2nd half of 2016 looks to be even stronger leading into a
very positive 2017. Residential land and lot sales will be the primary driver in the land markets for the next couple of years while retail will continue
to remain strong to keep up with new home sales. Industrial and office land, which has lagged since 2006, continues to show improvement but most
likely will grow at a much slower pace.
.
Quantum Commercial Group
Real Estate Advisors
Jack Mason
719.228.3631
jmason@quantumcommercial.com
Dale Stamp
719.228.3601
dstamp@quantumcommercial.com
Mary Frances Cowan, CCIM
719.228.3606
mcowan@quantumcommercial.com
Michael Palmer, SIOR
719.228.3626
mpalmer@quantumcommercial.com
Andrew Oyler
719.228.3601
aoyler@quantumcommercial.com
LAND TERMS AND DEFINITIONS
Paper Lot: A paper lot refers to a residential or commercial lot that has
received all necessary municipality approvals, (i.e. masterplan, zoning
and engineering) to begin installing services (sewer, water and electric)
and hardscape (curb, gutter and paving) for finished lots. Typically the
platting fees have been paid to the municipality to provide services to
the paper lots.
Finished Lot: Typically, a finished lot refers to a residential or commercial lot that has received all necessary municipality approvals and all of
the on-site improvements (i.e. curb, gutter, sewer and water stubs, etc.)
have been completed for a home to be constructed, sometimes referred
to as “permit ready”. The individual or home building company will
2
still be responsible for the final grading of the home and municipality fees that are due when the permit is pulled, (i.e. water and sewer,
application fee, etc).
On-Site Improvements: On-site improvements are the constructed improvements within the boundaries of the property which benefit only
that property and include services (i.e. sewer, water and electric, etc.)
and hardscape (i.e. curb, gutter and paving, etc.) for finished lots.
Off-Site Infrastructure: Refers to infrastructure (water, sewer, drainage,
curb, gutter and paving, etc.) that may be required by the approving
municipality to be constructed “off-site” of the actual parcel as part
of approval process for the actual development parcels. This is very
* Quantum Commercial Group Inc. (QCG) & CoStar may revise reported
quarterly and final year-end figures. Reproduction in whole or part is
permitted only with the written consent. Some of the data in this report
typical in many fast growing areas to assist municipalities in sharing
costs of infrastructure with the developers of numerous properties that
benefit from the improvements.
has been gathered from third party sources and has not been independently verified by Quantum Commercial Group makes no warranties or
representations as to the completeness or accuracy thereof.
2016 Quantum Commercial Group Inc