The number of residents living in downtown Colorado Springs in 2025 was nearly double what it was in 2024, more people visited the area last year, nearly 40 new businesses opened and total sales increased nearly 7% from 2024 — key trends that illustrate downtown remains among the city’s top places to live, work and play, according to advocacy group the Downtown Partnership.

“I think for years, especially post-pandemic, there’s been a lot of this chatter of: are downtowns dying? Are people actually going to come back to them? I think we’ve consistently shown that is the case,” said Chelsea Gondeck, the merchant group’s chief executive officer who stepped permanently into her new role on Jan. 1. She first joined the organization in 2021 and served as its interim CEO from June through December.

Gondeck talked with The Gazette ahead of the Partnership’s official unveiling of its 11^th annual State of Downtown report at Weidner Field on Thursday afternoon.

The report highlights trends and market conditions in the area throughout 2025. It cites data gathered from more than a dozen sources, including various city departments, the Colorado Springs Chamber of Commerce & EDC, the Colorado Department of Local Affairs, the Pikes Peak Regional Building Department and others.

The report serves as a resource for developers, investors, employers and others who could be interested in doing business downtown.

Residential boom

The number of residents who live downtown — an area just over 1 square mile in size that has long been considered to be the Springs’ economic, cultural and government hub — surged from 2,574 residents in 2024 to 4,860 in 2025.

The increase is the result of years of investment and planning by the Partnership and other stakeholders, Gondeck said. Driving more residential opportunity was a focus of the city’s 2016 downtown master plan, which the Partnership is now leading efforts to update.

There were approximately 1,100 housing units downtown in late 2015, Gondeck said. The area had been a housing desert for decades.

Thousands of new multifamily units have come online since. There are now 3,075 residential units, more than 80% of which have been built since 2015, according to the draft Elevate Downtown master plan, last updated in February.

Four new multifamily projects — Dorian, Ensley, The Hunter and VIM West — opened 712 new units downtown last year, according to the annual report. An additional 1,500 units are in the pipeline.

“So to quite literally, in one year, see a doubling of people who call downtown home is incredibly exciting and makes it all the more pertinent that we make sure that our downtown is activated and exciting and livable,” Gondeck said.

In recent years some residents and merchants shared concerns that downtown was unsafe or undesirable. The area contends with unique challenges like parking woes and homelessness, which many critics cited.

Gondeck believes that perception is shifting, and most people know downtown is a safe place to be as the Partnership and the city have responded to those concerns. For example, in July the group launched its pilot Clean & Safe program to reduce the impact of the area’s homeless residents and encourage more visitation.

“We don’t want to just put a Band-Aid on some of the challenges of the downtown environment. We want to actually address the root cause,” she said.

Visitation increases

Overall visitation to the area increased 16% last year, to 18.8 million annual visits, the report found. Downtown welcomed 15.5 million non-resident visitors, 4.3% more than in 2024; had 13.7 million out-of-market visits, an increase of 4.4%; and 3.3 million visits from downtown employees, up 1.7%.

The top five states for out-of-state visitation include Texas, California, Florida, Illinois and Kansas, according to the report.

“It’s super exciting to see our visitation numbers just continue to increase,” Gondeck said. Before the COVID-19 pandemic, downtown welcomed just over 12 million visitors in 2019.

“To me, that says people still love coming to downtown. People still see the unique asset that a downtown is and recognize its importance to a community,” she said.

Downtown’s average hotel occupancy rate in 2025 was 67%, surpassing 2024’s post-pandemic high with nearly 274,000 occupied room nights and breaking the record for the third consecutive year, the merchant group said.

Revenue and average daily rates, or the average revenue earned per occupied room each day, held flat as broader markets softened, the report found.

New businesses arrive, well-known vacancies remain

Thirty-seven new businesses opened downtown, eight more than in 2024. Twenty new food, beverage and entertainment venues led the way.

Fifteen businesses closed last year, according to additional data provided by the Partnership. The retail vacancy rate in the fourth quarter of 2025 was 7.2%, compared with 5.3% in the fourth quarter of 2024.

The area has contended with some long-term vacancies or indefinite closures, such as The Perk Downtown Coffee & Tea House, which permanently closed in May 2024 after more than 25 years in business. Kimball’s Peak Three Theater remains indefinitely closed since the death of its owner Kimball Bayles in January 2023, and Bingo Burger is still indefinitely closed after an early morning fire broke out inside the restaurant in October 2024, causing a total loss.

“Vacancies are a priority for us,” Gondeck said. “We are constantly working behind the scenes with property owners and commercial brokers to actively market these spaces, connect them with prospective tenants and help navigate some of the barriers that can make reactivation challenging, whether that’s build-out costs, financing or finding the right concept. Some spaces are unique and can take longer to reposition, but we continue to see interest in each of these properties.” 

Spending increases

Total sales downtown were roughly $503.6 million in 2025, a year-over-year increase of 6.7%.

Hard retail — a broad range of items that can include furniture, appliances, electronics and sporting goods — had the most growth at 28.2%. Soft retail, like apparel and bedding, had the next-highest increase at 17%, followed by bars and restaurants at 5.9%.

Service-related businesses, or those offering expertise, labor, consultation or specialized skills such as law offices and accountants, for example, lost 14.8% in sales over 2024.

More residents living downtown “create a reliable baseline of demand that supports businesses throughout the week,” Gondeck said, not just during peak tourism periods or during events. Day to day, residents spend more consistently on items like neighborhood retail and at restaurants and coffee shops.

Gondeck said her organization expects this trend will continue and expand, “especially as occupancy stabilizes,” she said.

In December, the city completed its Tejon Street Revitalization project that enhanced two blocks of Tejon, between Colorado Avenue and Kiowa Street.

The $8.6 million project made walkways wider and more accessible, expanded outdoor dining space for restaurants and relocated deliveries to new zones on side streets. The project intended to boost business activity, public safety and accessibility, officials previously said.

“We are a hub for culture, and even as maybe the wider city market or other cities are seeing kind of a stagnation, we’re just continuing to grow. That’s important because it draws a really diverse crowd of people,” Gondeck said, from young people entering the workforce to retirees. “… I think that robust and diverse crowd that we draw really strengthens our community and is going to make us really resilient moving forward.”

Other highlights in the State of Downtown report:

• Downtown has experienced $2.66 billion in investment since 2013, with $190.2 million additional investment since 2024. Significant projects include multifamily projects in the south end and east downtown, commercial space at Catalyst Campus and Palmer High School’s $117 million renovation.
• The 80903 zip code accounted for 119 building permits in 2025, or 7.6% of permits issued in Colorado Springs and 3.1% of permit values citywide.
• City for Champions venues Weidner Field, Ed Robson Arena at Colorado College and the U.S. Olympic & Paralympic Museum brought more than 530,000 visits to downtown.
• Downtown rents in the fourth quarter of 2025 averaged $1,870 a month, down 1.8% from 2024. Effective rents averaging $1,757 were down 5.5%, “providing modest relief for renters,” the report states.
• Downtown hosted 786 arts, culture and leisure events — more than a third of events citywide.
• As the office sector nationwide adjusts to lower demand, driven by a shift toward hybrid and remote work, downtown has avoided extreme vacancy spikes other larger metros have experienced, Gondeck said. After seeing promising decreases in office vacancy rates at the end of 2024 and the first half of 2025, the downtown office market saw a modest rise in vacancy, to 9.5%, in the fourth quarter of 2025. That was up from 8% in 2024 but lower than the 10.4% citywide rate. The city must reinvest in its existing downtown office stock and build new, highly amenitized working spaces to attract more in-office workers, Gondeck said.