RETAIL HOT SPOTS BUBBLING UP IN FAST-GROWING COLORADO SPRINGS AREA
8/22/2022
By Rich Laden [email protected]
Retail follows rooftops might be one of the real estate industry's oldest clichés, yet it explains why the InterQuest area in northern Colorado Springs and the Powers Boulevard corridor on the east and northeast sides have become the Pikes Peak region's hottest commercial hubs. Scores of restaurants, stores, hotels, entertainment uses and the like have flocked to the areas, enticed by thousands of homes and apartments built in nearby neighborhoods over the last 20-plus years.
But the steady march of retailers and other commercial users hasn't stopped at InterQuest and Powers; other fast-growing parts of Colorado Springs and the region have seen their share of commercial development hot spots, too.
Three prime examples: the intersections of Woodmen and Marksheffel roads and Marksheffel and Constitution Avenue, along with the unincorporated Falcon area outside of the Springs.
Not surprisingly, they're taking shape to the east and northeast of the Springs.
"That’s where most of our growth in the city is really headed, both north and east," said John Winsor, a retail broker with the Olive Real Estate Group in Colorado Springs who's marketing the northeast corner of Woodmen and Marksheffel. "With the density of homes that are already there, but with many more coming, that's where you're going to find the commercial growth as well."
At or near Woodmen and Marksheffel, familiar names like Starbucks, Auto Zone and 7-Eleven have opened, while McDonalds, Taco Bell, Pizza Hut, Dutch Bros coffee and a Kum & Go convenience store are on their way.
Marksheffel and Constitution got a boost when King Soopers opened five years ago at a shopping center at the intersection.
Now, another retail center is being developed across Constitution from the King Soopers center, where Tropical Smoothie Cafe, 7-Eleven, Christian Brothers automotive and an AT&T store have opened; they're expected to be joined by Rock N Roll Sushi, Freddy's Frozen Custard & Steakburgers and the area's first Teriyaki Madness fast casual restaurant.
Significant commercial development in Falcon dates to 2000, when a Safeway shopping center opened to serve suburban-like housing areas that took the place of Falcon's rural, large-sized home sites. A Walmart Supercenter-anchored shopping center followed in 2007.
Now, King Soopers has started construction of a store that will open in 2023 and anchor a third major shopping center along Woodmen Road, while smaller Falcon-area retail centers, such as The Shops at Meridian Ranch, are expanding as well.
"Retail is chasing the rooftops, it's always the rooftops," said John Egan of NAI Highland Commercial in the Springs, who's marketing Woodmen and Marksheffel's northwest corner and who developed a multitenant building on the site that's 100% leased. "Rarely do I see retail lead and then residential follow. It's usually the other way around."
The east and northeast sides of the Springs and portions of unincorporated El Paso County continue to see residential development in areas such as Wolf Ranch, Sterling Ranch and Claremont Ranch that are a short drive from Woodmen and Marksheffel or Marksheffel and Constitution.
The massive, more than 21,000-acre Banning Lewis Ranch makes up the eastern one-third of Colorado Springs, where thousands of homes are planned and hundreds have been built. Its north side runs along Woodmen, while Banning Lewis Ranch residents and those in Falcon neighborhoods often travel that road; other Falcon homeowners drive along U.S. 24, where they can exit onto Constitution to reach the Marksheffel and Constitution area.
Tim Holliday, a southern Colorado franchisee for the Jersey Mike's sandwich chain, plans to open his 11th location late this year or in early 2023 in Egan's retail building on the northwest corner of Woodmen and Marksheffel.
Holliday worked with Egan for about 3½ years to find a northeast-side location; he already has a shop at Powers and Constitution, while corporate officials from Jersey Mike's identified the Falcon area as a possible new store site, he said. Locating at Woodmen and Marksheffel serves as a halfway point between his Powers-and-Constitution store and Falcon, Holliday said.
"When we looked at it, we saw there was a fair bit of competition in Falcon itself," he said. "We thought if we could kind of split it in the middle, Marksheffel and Woodmen was kind of that perfect area that gives us all of that growth of households coming up in Banning Lewis."
But retail following rooftops isn't the only reason for the emergence of new commercial development hot spots.
Large, undeveloped chunks of land are needed to build on, and they're more plentiful to the east and northeast. Stores, restaurants and the like, meanwhile, want to locate along major roadways, which offer access and visibility; Woodmen, Marksheffel and Constitution fit that bill.
"With Woodmen Road being our main east-west thoroughfare in town, that's also going to produce hot spots all along the way," Winsor said.
Developers and retailers looking for hot spots also covet areas with solid household incomes, said Russ Perkins, a principal in the Arizona office of Evergreen Devco, the real estate company developing Falcon Marketplace, now under construction at Woodmen and Meridian roads in Falcon.
"Certainly, rooftops is what attracts the attention of ourselves and our repeat retail clients," he said. "But those rooftops need to house people that are reasonably believed to have money they're willing to spend."
Retailers and developers also look for areas with large daytime populations, entertainment attractions and a municipal infrastructure, said Michael DePalma, a vice president with the SullivanHayes Brokerage in Denver, which is marketing the new Sand Hill retail center on the northeast corner of Marksheffel and Constitution.
One of the biggest factors for the success of any burgeoning retail hot spot is confidence that the location has a future, DePalma said.
In the case of Marksheffel and Constitution, King Soopers opened one of its larger footprint, 123,000-square-foot marketplace stores — about twice as large as a typical King Soopers grocery — at the Claremont Ranch Marketplace, which was developed by Evergreen Devco southeast of the intersection.
King Soopers, DePalma said, did its research to show that demand existed in the area for retail and other services. The grocer's willingness to invest in the area paved the way for Armstrong Capital Development, a Denver-area real estate investment company, to launch development of the 10-acre Sand Hill retail center, he said.
"King Soopers, Kroger Co., did a great job of doing their forecasting and so they were the first ones to put a pin in the intersection at Constitution and Marksheffel," DePalma said. "They try and be five to 10 years out, ahead of residential development so they can establish a traffic pattern for consumers, to be the grocery store part of their weekly needs. They planted a flag there at the southeast corner."
Sometimes, said Evergreen Devco's Perkins, one retailer needs "to push that snowball and get it rolling down the hill. You need that anchor to take that chance and then the momentum builds. So, Constitution and Marksheffel, I think all four corners now have a lot of activity that may never have happened if King Soopers didn't take a chance on the intersection. And now that they did, King Soopers will benefit because of all that extra draw."
The same trend happened in the Falcon area, preceding Evergreen Devco's plan to develop Falcon Marketplace, Perkins said. Walmart, Safeway, Walgreens and other national retailers and restaurants have operated in Falcon over the last 20 years, he said.
"Sometimes you need proof of concept," Perkins said. "So, in Falcon for example, there's already a small stable of retailers there that seem to be surviving, if not thriving. The Safeway center in Falcon, the Walmart center, every time I drive by, it looks reasonably full."
Though the east and northeast sides have seen an influx of retail hot spots, one of the newest could pop up in Fountain, south of Colorado Springs, Perkins said.
Evergreen Devco has entered into a joint venture agreement with a landowner with a goal of developing 100-plus acres southeast of Mesa Ridge Parkway and Syracuse Street, he said. The deal is contingent on Evergreen securing an anchor for the project, which would include a multitenant retail building and a half-dozen stand-alone buildings.
Evergreen Devco hopes to have an announcement about the project and its anchor within two months, Perkins said.
If the project moves forward, it would build upon Fountain's rapidly growing residential market and the success of other stores in the city, including a Safeway that co-anchors the Markets at Mesa Ridge center farther east at Mesa Ridge Parkway and Fountain Mesa Road.
"It's not a secret that the Safeway does extremely well," Perkins said. "It's one of their best stores. So the supply-demand issue would lead someone to think, OK, well there must be more room for somebody else to come in."
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