Why Is Colorado Springs One of the Fastest Growing Commercial Real Estate Markets in the Mountain West?
Colorado Springs has quietly become one of the most compelling commercial real estate markets in the western United States, fueled by a defense and aerospace economy that generates roughly $10.2 billion in annual economic impact and supports approximately 111,000 jobs across more than 200 space, cybersecurity, and defense companies. The city's five military installations, including Peterson Space Force Base, Schriever Space Force Base, Cheyenne Mountain Space Force Station, and the newly permanent U.S. Space Command headquarters, create an economic foundation that few markets can match for stability and growth potential.
The metro area population has grown to approximately 709,000 residents, with projections suggesting continued expansion driven by military realignment, technology sector growth, and quality of life migration from higher cost Colorado Front Range markets. El Paso County's construction sector posted around $3.7 billion in total construction value in 2025, an 8% increase over the prior year, with commercial development permits jumping 31% compared to 2024.
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For borrowers seeking commercial financing in Colorado Springs, these fundamentals translate into a lending environment where property performance and local economic drivers give lenders confidence. Whether you are acquiring multifamily housing near Fort Carson, industrial space along the Powers corridor, retail in the booming Interquest marketplace, or office properties serving defense contractors in the Briargate area, understanding the local financing landscape is the first step toward a successful transaction.
The commercial real estate market in Colorado Springs has entered a period of stabilization rather than decline. Deals continue to close across all property types, and lenders with Front Range expertise remain active in the market despite higher interest rates and cautious national sentiment.
What Types of Commercial Loans Are Available in Colorado Springs?
Colorado Springs borrowers have access to a full spectrum of commercial loan products, each designed for different property types, investment strategies, and borrower profiles. The market benefits from both national lending platforms and regional banks with deep knowledge of El Paso County's unique economic dynamics.
Conventional Bank Loans serve as the backbone of Colorado Springs commercial financing. Local and regional banks including Colorado-based institutions offer rates between 6.25% and 7.75% with terms of 5 to 10 years and up to 75% loan-to-value. These loans work best for stabilized properties with strong occupancy and proven operating histories. Banks with military community expertise often provide preferential terms for properties serving defense sector tenants.
SBA Loans provide powerful financing for owner-occupied commercial properties in Colorado Springs. The SBA 504 program offers up to 90% financing at fixed rates between 5.75% and 6.75% for 20 to 25 year terms. Business owners along Academy Boulevard, in Downtown, or in the growing northern corridors can leverage this program to purchase their commercial space with as little as 10% down.
Bridge Loans fill the gap for transitional properties in Colorado Springs. With rates between 8.0% and 11.0% and terms of 12 to 36 months, bridge financing enables investors to acquire, renovate, and stabilize properties before refinancing into permanent debt. The Powers corridor and southeast Colorado Springs offer particular opportunities for bridge loan strategies on value-add properties.
CMBS and Conduit Loans provide non-recourse financing for larger Colorado Springs commercial assets. Rates range from 5.88% to 7.49% with 5 to 10 year terms and up to 75% LTV. These programs work well for anchored retail centers, stabilized multifamily complexes, and NNN leased properties.
DSCR Loans allow investors to qualify based solely on property cash flow rather than personal income. Rates range from 7.0% to 9.0% with 30 year amortization and no income verification required. This program has become increasingly popular among Colorado Springs rental property investors, particularly for small multifamily and single tenant commercial acquisitions.
Hard Money Loans provide the fastest closing option for time-sensitive acquisitions. Rates range from 10.0% to 13.0% with terms of 6 to 18 months and up to 65% LTV. These loans serve investors who need to close quickly on distressed or off-market deals.
Which Colorado Springs Submarkets Offer the Strongest Commercial Real Estate Fundamentals?
Colorado Springs' commercial real estate market is defined by distinct submarkets, each with unique demand drivers, tenant profiles, and financing considerations. Understanding these geographic differences helps borrowers identify where lender appetite is strongest.
Briargate and Interquest anchor the northern growth corridor along I-25, benefiting from proximity to the U.S. Air Force Academy, rising household incomes, and rapid residential development. Retail vacancy in the northeast submarket sits well below the metro average, with rents reaching nearly $26 per square foot, the highest in the region. Commercial development in the Interquest area continues to attract national retailers, restaurants, and service businesses. Lenders view northern corridor properties favorably due to strong demographics and population density growth.
Downtown Colorado Springs is experiencing a renaissance driven by roughly $2 billion in announced investment across multifamily, hospitality, and mixed-use projects. The planned 27-story OneVela tower, with 404 residential units and ground floor retail, represents the type of transformative development reshaping the city center. The Park Union and East End districts are in conceptual planning phases for multi-acre redevelopment. Downtown properties attract financing from lenders comfortable with urban revitalization and mixed-use underwriting.
Powers Corridor runs along the eastern side of the city and serves as a major commercial spine for retail, industrial, and flex space. The area benefits from strong traffic counts, proximity to Peterson Space Force Base, and access to a growing suburban residential population. The planned diverging diamond interchange at Airport Road and Powers Boulevard, expected to complete by mid-2026, will further enhance access and commercial property values.
Southeast and Fort Carson Area serves the military community with a concentration of multifamily housing, retail services, and flex industrial space. Fort Carson's approximately 25,000 military personnel and their families create steady demand for commercial properties in this submarket. The Venture on Venetucci project will bring 336 new apartment units to this area, reflecting ongoing investment in military-adjacent housing.
Airport and Fountain represent emerging commercial corridors benefiting from the Colorado Springs Airport's expansion plans and southward population growth along I-25. Industrial and logistics properties in this area command lower per-square-foot pricing than other submarkets, offering value-add opportunities for investors willing to take a longer-term position.
What Are the Current Commercial Loan Rates in Colorado Springs?
Commercial loan rates in Colorado Springs reflect both national capital market conditions and local market dynamics. As of early 2026, borrowers benefit from a lending environment where the city's strong economic fundamentals, low unemployment, and defense sector stability help offset the impact of elevated interest rates on property valuations and cash flow.
Colorado Springs commercial mortgage rates have generally tracked the national market, with slight premiums for smaller deals and properties outside the primary northern and downtown corridors. Borrowers with strong credit, experienced track records, and well-located properties can access rates at or below the ranges listed above.
The local lending market includes several Colorado-based banks and credit unions that maintain dedicated commercial real estate teams with specific Colorado Springs market knowledge. These lenders often provide more competitive terms for borrowers with existing banking relationships and properties in submarkets they know well.
Rate variability within Colorado Springs can be significant. A stabilized Class A multifamily property in Briargate will price 100 to 200 basis points below a value-add retail center on South Academy Boulevard. Borrowers should model multiple scenarios using a commercial mortgage calculator to understand how different rate assumptions affect their returns.
How Do Colorado Springs' Military Installations Affect Commercial Lending?
The presence of five military installations and the permanent headquarters of U.S. Space Command creates a unique dynamic in Colorado Springs' commercial lending market. Defense sector stability provides lenders with confidence in the long-term demand fundamentals that underpin commercial property values across the metro.
Approximately 45,000 active-duty military personnel, Guard members, and Reservists are stationed in the Pikes Peak region, along with around 15,000 federal civilians and roughly 90,000 veterans and retirees. This military population generates consistent demand for housing, retail services, dining, healthcare, and professional services that supports commercial property occupancy across all sectors.
U.S. Space Command's permanent basing in Colorado Springs is expected to add around $450 million annually to the regional economy, with military construction spending projected between $500 million and $1 billion for new facilities. This investment creates both direct construction lending opportunities and downstream demand for commercial properties serving the expanded workforce.
Lenders evaluating Colorado Springs commercial properties often view military-adjacent locations favorably because of the reliable income streams that defense sector employment provides. Properties near Peterson Space Force Base, Schriever SFB, and Fort Carson benefit from tenant demand that is relatively insulated from broader economic cycles. Defense contractor office tenants, in particular, tend to maintain physical office presence at higher rates than many other sectors, which has helped insulate Colorado Springs' office market from the remote work disruption affecting other cities.
For borrowers, the military presence means that lenders are generally comfortable with Colorado Springs' long-term demand outlook. This translates into willingness to lend on a broader range of property types and locations than might be the case in markets without such a strong institutional employment anchor.
What Should Borrowers Know About Colorado Springs Property Types and Financing?
Each commercial property type in Colorado Springs carries distinct financing characteristics shaped by local market conditions, supply and demand dynamics, and lender preferences.
Multifamily properties represent the largest share of commercial lending activity in Colorado Springs. The market is resetting after significant new supply delivered in 2024, with vacancy near 7% and rents down approximately 7% year-over-year. Roughly 2,800 units remain under construction, but completions are slowing to about 1,350 units expected in 2026. Lenders remain active in multifamily lending but are underwriting to current rents rather than projected recovery, making properties with strong in-place cash flow the easiest to finance.
Industrial space in Colorado Springs benefits from low vacancy around 5.1%, well below both Denver and national averages. Limited new construction of approximately 382,000 square feet under development supports the tight supply picture. Industrial properties along the Powers corridor, near the airport, and in the Fountain area attract competitive financing terms due to the sector's strong fundamentals.
Retail remains one of the strongest performing sectors in Colorado Springs, with availability at just 5.7% and general retail vacancy as low as 4.0%. The northeast submarket around Briargate and Interquest commands the highest rents and lowest vacancy. Limited new retail construction of approximately 110,000 square feet under development ensures continued tight conditions for the foreseeable future.
Office properties in Colorado Springs have performed better than the national average, with direct vacancy at approximately 9.2% compared to the 14.0% national benchmark. The city's defense contractor base maintained physical office presence during and after the pandemic, insulating the local market from the steep declines experienced in other cities. However, CBD vacancy has risen to around 13.2%, while suburban office in defense-heavy corridors remains tighter.
Construction Loans are available for ground-up development in Colorado Springs, with commercial permits jumping 31% in 2025. High-value projects include the $45 million American Furniture Warehouse, $22 million After Sunset Hotel, and multiple apartment complexes. Construction lending rates range from 7.5% to 10.0% with 18 to 36 month terms.
How Does the Colorado Springs Loan Application Process Work?
Securing commercial financing in Colorado Springs follows a structured process that borrowers should understand before entering the market. Preparation and local market knowledge significantly improve both the speed and terms of loan approval.
The application process begins with a property analysis and borrower assessment. Lenders evaluate the property's income, condition, location, and tenant quality alongside the borrower's experience, net worth, liquidity, and credit history. For Colorado Springs properties, lenders with local expertise will assess the property's relationship to military installations, defense contractor tenant base, and submarket growth trajectory.
Document preparation is critical. Lenders typically require three years of property operating statements, a current rent roll, borrower financial statements, tax returns, and a schedule of real estate owned. For acquisitions, a detailed business plan explaining the investment thesis and hold strategy strengthens the application. Properties near military installations should include analysis of the local defense employment base and its impact on tenant demand.
Appraisal and due diligence follow loan application acceptance. Colorado Springs commercial appraisals require familiarity with local market dynamics and comparable transactions. Environmental assessments, property condition reports, and title searches are standard requirements. The I-25 corridor's historical military and industrial use may require additional environmental review for certain properties.
Underwriting and closing timelines vary by loan program. Conventional bank loans close in 45 to 60 days, SBA loans in 60 to 90 days, bridge loans in 14 to 30 days, and CMBS loans in 60 to 90 days. Working with a lender experienced in Colorado Springs accelerates the process significantly.
What Infrastructure and Development Projects Are Shaping Colorado Springs Commercial Real Estate?
Several major infrastructure and development initiatives are reshaping Colorado Springs' commercial landscape and creating new financing opportunities for investors and developers.
The I-25 improvement project stretching from Fillmore to the Garden of the Gods exit is expected to complete by early fall 2026, adding acceleration and deceleration lanes in both directions. This project enhances access to commercial properties along the I-25 corridor and supports property values in the northern growth areas.
The Airport Road and Powers Boulevard diverging diamond interchange, scheduled for completion by mid-2026, will improve traffic flow in one of the city's busiest commercial corridors. Properties near this interchange stand to benefit from improved access and visibility.
Downtown Colorado Springs is experiencing transformative investment. The OneVela 27-story mixed-use tower, new hotel developments, and the planned El Pomar Conference Center represent a new era of urban development that is attracting both institutional and private capital. The downtown transit center, with groundbreaking planned for 2025, will enhance connectivity and support mixed-use property values.
Colorado Springs Utilities' $396 million Wastewater System Expansion Project beginning in 2026 ensures that infrastructure capacity will support continued commercial and residential growth in expanding areas of the city.
The University of Colorado Colorado Springs (UCCS) campus expansion continues to generate demand for student housing, retail services, and commercial properties in the northern part of the city. The university's growing enrollment and research programs create a secondary economic anchor beyond the military and defense sectors.
How Can Colorado Springs Borrowers Strengthen Their Commercial Loan Applications?
Borrowers seeking commercial financing in Colorado Springs can take specific steps to improve their chances of approval and secure more favorable terms.
Demonstrate local market knowledge in your loan application. Lenders value borrowers who understand Colorado Springs' unique economic drivers, submarket dynamics, and growth trajectory. Reference specific data points about military employment, defense sector investment, population growth, and infrastructure improvements that support your investment thesis.
Build relationships with Colorado-based lenders who understand the Pikes Peak region. Local banks and credit unions with dedicated commercial real estate teams often provide more competitive terms and faster processing than national lenders unfamiliar with the market. Having an existing deposit relationship with a local bank can yield rate reductions of 25 to 50 basis points.
Prepare for military-related underwriting questions. If your property serves defense contractor tenants or military-adjacent housing demand, be prepared to discuss BRAC risk (Base Realignment and Closure), contract concentration, and the long-term outlook for military investment in the region. The permanent basing of U.S. Space Command provides strong support for answering these questions positively.
Consider working with a commercial mortgage broker who specializes in Colorado Springs and Front Range financing. An experienced broker can match your property profile with the most competitive lending sources and negotiate terms that a direct-to-lender approach might not achieve.
Use our DSCR calculator to model your property's debt service coverage before approaching lenders. Understanding your numbers in advance demonstrates preparation and professionalism that lenders appreciate.
Frequently Asked Questions About Commercial Loans in Colorado Springs
What is the minimum down payment for a commercial loan in Colorado Springs?
The minimum down payment for a Colorado Springs commercial loan depends on the financing program. SBA 504 loans for owner-occupied properties require as little as 10% down. Conventional bank loans typically require 20% to 35% down depending on property type and borrower qualifications. DSCR loans require 25% to 30% down. Bridge loans require 25% to 35% down. The specific amount depends on property type, location within the Colorado Springs metro, tenant quality, and borrower experience.
How long does it take to close a commercial loan in Colorado Springs?
Closing timelines for Colorado Springs commercial loans vary by program. Bridge loans close fastest at 14 to 30 days. Conventional bank loans typically close in 45 to 60 days. CMBS loans require 60 to 90 days. SBA loans take 60 to 90 days due to government agency review. Working with a lender experienced in the Colorado Springs market and having complete documentation prepared at application can accelerate the timeline by 1 to 2 weeks.
Does the military presence affect commercial property values in Colorado Springs?
Yes, the military presence significantly impacts commercial property values in Colorado Springs. The approximately 45,000 active-duty personnel, 15,000 federal civilians, and 90,000 veterans create sustained demand for housing, retail, dining, and services. U.S. Space Command's permanent basing is projected to add around $450 million annually to the regional economy. Lenders view military-adjacent properties favorably because of the reliable, recession-resistant demand these installations generate.
What credit score do I need for a commercial loan in Colorado Springs?
Credit score requirements for Colorado Springs commercial loans vary by program. Conventional bank loans typically require 680 or higher. SBA loans require 660 or higher. DSCR loan programs may accept scores as low as 640 but charge higher rates below 700. Hard money loans may have no minimum credit score requirement, focusing instead on property value and borrower equity. Higher credit scores consistently result in better rates and terms across all programs.
Can I finance a mixed-use property in Colorado Springs?
Yes, mixed-use properties are actively financed in Colorado Springs, particularly in the downtown core and along major commercial corridors. Lenders evaluate mixed-use properties based on the income contribution of each component, whether residential, retail, or office. Downtown mixed-use projects have become increasingly popular as the city center attracts more than $2 billion in announced investment. SBA 504 loans work well for owner-occupied mixed-use properties where the business occupies at least 51% of the space.
What are the most active commercial lending areas in Colorado Springs?
The most active commercial lending areas in Colorado Springs include the Briargate and Interquest northern corridor for retail and office, downtown for mixed-use and multifamily, the Powers corridor for industrial and flex, Fort Carson area for military-adjacent multifamily and retail, and the airport and Fountain area for industrial and logistics. The northeast submarket commands the highest commercial rents and attracts the most competitive financing terms due to strong demographics and population growth.
Taking the Next Step With Colorado Springs Commercial Financing
Colorado Springs offers commercial real estate investors and owner-occupants a market defined by defense sector stability, steady population growth, and infrastructure investment that supports long-term property values. Whether you are exploring multifamily acquisitions, industrial investments, retail opportunities in the Interquest corridor, or construction financing for ground-up development, the Pikes Peak region provides a fundamentals-driven market that lenders view favorably.
The key to securing competitive commercial loan terms in Colorado Springs is matching your property profile and investment strategy with the right lending program while demonstrating an understanding of the local market dynamics that drive property performance.
Contact Clearhouse Lending to discuss your Colorado Springs commercial financing needs and receive a customized rate quote for your property.