NNN Financing in Colorado Springs: 2026 Guide for Net Lease Investors

The Colorado Springs NNN Market in 2026

Colorado Springs has emerged as a stabilized, cash-flowing NNN market that offers higher yields than Denver while maintaining solid tenant credit quality and predictable demand drivers. The city's economy rests on a foundation uncommon among U.S. metros: the largest military employer base of any American city outside Washington, D.C. This structural advantage translates directly into recession-resistant retail demand, making NNN properties here attractive to yield-focused investors who value certainty over growth.

In 2026, Colorado Springs NNN cap rates range from 5.50 percent (best tenants) to 6.75 percent (lower-rated or secondary-location tenants), with most stabilized triple-net deals trading in the 5.75 to 6.50 percent range. These yields are 50 to 100 basis points higher than comparable Denver deals, a differential that has attracted significant 1031 exchange capital from Denver sellers and an increasing number of out-of-state buyers seeking alternatives to California's saturated markets.

Land costs in Colorado Springs remain lower than Denver, and the supply of pad-site opportunities in growing submarkets is more abundant. This combination creates opportunities for value-add NNN investors who can source off-market deals or negotiate better lease economics than in more competitive metros.

Military and Defense: The Stabilizing Force

Colorado Springs is home to four major military installations and NORAD/NORTHCOM, cementing its status as a military and defense hub. Peterson Space Force Base, Schriever Space Force Base, Fort Carson Army post, and the U.S. Air Force Academy collectively employ tens of thousands of active-duty personnel, civilian contractors, and dependents. This population generates steady, predictable demand for quick-service restaurants (QSRs), dollar stores, auto parts retailers, automotive service centers, and pharmacy/health services.

The military population also anchors the space and defense industry cluster that has grown dramatically in Colorado Springs over the past decade. Lockheed Martin, Raytheon Missiles & Fire Control, L3Harris, and Northrop Grumman all maintain significant operations in the city. These employers support additional retail spending and workforce housing demand that benefits NNN retail properties.

For lenders, the military and defense foundation of Colorado Springs' economy translates to lower unemployment, stable population inflow (especially among families on permanent change of station), and predictable consumer spending patterns. It also means NNN properties here weather recessions better than properties dependent on discretionary retail or tourism alone.

Growth Submarkets: Powers, Briargate, Monument

Colorado Springs has three primary NNN investment corridors in 2026:

• Powers Corridor (Northeast): The fastest-growing submarket, with new residential development and expanding retail. QSR brands like Chick-fil-A, Raising Cane's, and Wingstop are aggressively expanding here. Powers offers strong demographic tailwinds, younger renters, and solid population growth. Cap rates tend to be tighter (5.50 to 6.00 percent for top tenants) due to growth expectations.
• Briargate (North): An upscale residential pocket north of the city with high household incomes and strong population growth. This submarket attracts higher-credit tenants and can command lower cap rates. Pad sites in Briargate are in strong demand, and lenders prefer placements here due to proximity to quality demographics and lower environmental risk.
• Monument/Tri-Lakes (North of City, Between CS and Denver): A strong suburban corridor with growing population and retail demand. Located between Colorado Springs and Denver, Monument has become a destination for 1031 buyers seeking commuter-friendly locations with solid demographics. Cap rates here sit in the mid-6 percent range.
• South Academy (Near Fort Carson): Active military presence drives steady retail demand. More value-oriented tenants and cap rates (6.25 to 6.75 percent), but with stable, recession-resistant cash flows.

Top NNN Tenants and Cap Rates

The most active NNN tenants in Colorado Springs in 2026 reflect the military and defense demographic:

• Quick-service restaurants (QSR): 5.50 to 6.25 percent cap rates. Chick-fil-A, Raising Cane's, Wingstop, and Dutch Bros are particularly active. Dutch Bros is one of the fastest-growing NNN tenants in Colorado Springs, with multiple locations in development or recent opening in Briargate and Powers.
• Dollar stores and discount retail: 6.00 to 6.75 percent. Dollar General, Family Dollar, and similar tenants drive consistent traffic and solid cash flows in military-adjacent areas.
• Auto parts retail and service: 5.75 to 6.25 percent. AutoZone, O'Reilly Auto Parts, and automotive service centers (oil change, quick lube) are stable performers given military base proximity and vehicle ownership among service members.
• Fitness and wellness: 6.25 to 6.75 percent. Planet Fitness and similar brands have expanded significantly, benefiting from military base population and health-conscious demographics.
• Medical and dental: 5.75 to 6.25 percent. Essential-use tenants with investment-grade credit remain attractive to lenders and long-term hold investors.

Lender Options for Colorado Springs NNN

Financing for Colorado Springs NNN properties has become increasingly available and competitive in 2026. A national bank with a dedicated net lease division offers programs for sub-$5 million properties with strong tenant credit, competitive rates, and straightforward underwriting. Life insurance companies and portfolio lenders are also active, particularly for investments $5 million and above in prime submarkets like Briargate and Powers.

Typical Colorado Springs NNN loan terms in 2026:

• Loan-to-value (LTV): 65 to 70 percent, depending on tenant credit, location, and property condition.
• Debt service coverage ratio (DSCR): 1.30x to 1.45x minimum, with lenders preferring 1.40x or stronger for investment-grade tenants.
• Interest rates: CMT (Constant Maturity Treasury) plus 190 to 250 basis points, depending on loan size, tenant strength, and market conditions. Smaller loans ($1M to $3M) typically price at CMT+220 to CMT+250; larger loans with strong tenants may price at CMT+190 to CMT+210.
• Terms: 10, 15, and 20-year amortizations, with most NNN deals in the 10 to 15-year range.

Environmental and hazard underwriting is thorough. The region's wildfire history (notably the 2012 Waldo Canyon fire and 2013 Black Forest fire in the north) means lenders scrutinize property location relative to high-hazard zones. Pad sites in Briargate and Powers typically clear environmental review cleanly, while properties in the foothills or northern edges of the metro may face additional scrutiny or require hazard insurance verification.

Comparing Colorado Springs to Denver for NNN Investors

Denver dominates Colorado's NNN market in terms of volume and name-brand tenant penetration. However, Colorado Springs offers several distinct advantages for investors and lenders in 2026:

• Higher cap rates: 50 to 100 basis points above comparable Denver properties, offering improved yield for the same tenant credit quality.
• Lower land and acquisition costs: A $2.5 million NNN property in Colorado Springs is typically easier to underwrite and finance than a $3.2 million equivalent in Denver.
• More off-market opportunities: Colorado Springs' NNN market is less efficient than Denver's, creating opportunities for patient, local investors to negotiate better lease terms or find sub-market-rate properties.
• 1031 exchange destination: Denver sellers seeking yield often buy down in Colorado Springs. California 1031 buyers increasingly view Colorado Springs as a yield-accretive alternative to Denver, supporting steady capital inflow.
• Structural stability: Military and defense employers provide a recession-resistant demand floor that Denver cannot match.

Underwriting Notes for This Market

Lenders approach Colorado Springs NNN deals with attention to a few key factors:

• Tenant credit and local market presence matter more than national scale. A strong regional tenant with deep Colorado Springs roots may be valued equally to a national brand with limited local footprint.
• Location within the four primary submarkets (Powers, Briargate, Monument, South Academy) significantly impacts lender appetite and pricing. Briargate and Powers command the most favorable terms.
• Military proximity and population density drive underwriting. Properties within a 3 to 5-mile radius of Peterson SFB, Schriever SFB, or Fort Carson benefit from demographic strength and stable cash flows.
• Environmental risk, particularly wildfire and flood hazard, is underwritten carefully. Properties with clear environmental reports and hazard insurance move faster through approval.
• Smaller loan sizes ($1M to $4M) are welcome among bank programs, making Colorado Springs an accessible market for emerging investors or those building small portfolios.