Market Reports

New Mexico Retail Pauses, But Should Return After COVID-19

by Jeff Shaw July 21, 2020

By George Chronis, Senior Advisor, SVN/Walt Arnold Commercial Brokerage New Mexico retail has been negatively impacted by the state’s stay-at-home order due to the coronavirus. The retail industry was looking pretty promising with robust sales and leasing activity in 2019 and at the beginning of 2020 – New Mexico included. I thought we were off to a good start with several developments near completion, several in progress and several more to begin in 2020. The full economic impact of shuttering our economy for two months or more won’t be known for quite some time. General retail, gyms, restaurants and soft good retailers have been hit the hardest. I have recently consulted with landlords, tenants and developers who have active projects throughout the state. Developers and landlords in the Permian Basin have been hit especially hard by a double whammy. This includes New Mexico’s stay-at-home order, which was compounded by lower global demand for crude oil and the price war between Saudi Arabia and Russia. We shall see who emerges and reopens for business when the stay-at-home order is lifted. There will be some opportunities to expand for those who still have strong financial positions after all this passes. Many landlords …

July 21, 2020

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Industrial Market Reports New Mexico Western Western Market Reports

New Mexico is Primed for Industrial Development

by Jeff Shaw June 24, 2020

By Riley McKee, Advisor, NAI Maestas & Ward If summarized in one word, New Mexico’s industrial real estate market can best be described as undersupplied. Steady increases in demand, combined with a dearth of new construction, have resulted in record-low vacancy rates in Albuquerque, Las Cruces and Santa Fe – the state’s primary metropolitan areas. A string of noteworthy projects are underway in Albuquerque. Food products supplier Ben E. Keith Foods is building a 260,000-square-foot regional headquarters and distribution center to service markets throughout the region. FedEx Freight recently opened a 95,000-square-foot distribution center strategically positioned on a 50-acre site to expedite planned expansions. Brunacini Development, the city’s largest industrial landlord, just completed a 140,000-square-foot multi-tenant distribution center anchored by Bunzl, a London-based food packaging distributor. Finally, and perhaps most notably, nuclear energy firm Kairos Power acquired an 110,000-square-foot research and development facility after a nationwide site selection process. It plans to expand the facility, which sits on 35 acres, as part of an incentive package with the state. Las Cruces is seeing strong development activity as well, specifically in Santa Teresa, an international Port of Entry that sits 21 miles south of the city. W. Silver Recycling, which processes …

June 24, 2020

Market Reports New Mexico Office Western Western Market Reports

Albuquerque’s Office Market Sees Positive Absorption, New Construction

by Taylor Williams September 4, 2018

New Mexico’s office market has held steady along with the rest of the country throughout 2017. New development in areas outside of metro Albuquerque, like the Facebook development in Los Lunas, is attracting retail- and service-related businesses. While it remains to be seen what this means to the general commercial real estate industry, it is encouraging to see increases in activity in areas where there had been little to no growth in recent years. Albuquerque, the heart of New Mexico’s office market, saw positive absorption start to increase from the past two quarters. The market is seeing organic tenant movement and, more importantly, there has been a swelling interest in Albuquerque metro areas from out-of-state companies looking for a Mountain Time Zone location that is economically attractive. Co-working spaces have gained in momentum with several cropping up since the end of 2016. New co-working spaces include Gravitate, which has expanded into two new locations near FreeRange and the new Tramway Plaza. We expect this trend to continue as the state focuses on investing in entrepreneurs and startup companies. New construction is expected to increase the overall Class A inventory over the course of 2018 and 2019. Compared to many other …

September 4, 2018

Industrial Market Reports New Mexico Western Western Market Reports

Albuquerque’s Industrial Market Sees Strong Absorption From Warehouse, Manufacturing Users

by Taylor Williams August 28, 2018

The metro Albuquerque industrial market reported more than 39 million square feet of total industrial space as of year-end 2017. The two largest categories of occupied space were warehouse/distribution (12.5 million square feet with 5.5 percent vacancy) and manufacturing (12.55 million square feet with 3.5 percent vacancy). The overall market vacancy rate at the end of 2017 was 5.7 percent for all industrial uses in buildings with more than 10,000 square feet. New Mexico added about 11,000 non-agricultural jobs from February 2017 through February 2018. The Albuquerque MSA added 5,800 jobs — a 1.5 percent increase — over this period, or more than half of the new jobs added in New Mexico. Albuquerque’s unemployment rate was 5 percent as of February, which is a notable improvement over the 6.2 percent unemployment rate in February 2017. During this period, the private service-providing industries grew by 3,100 jobs, or 1.2 percent, while the goods-producing industries (warehouse and manufacturing users) added 2,300 jobs, representing a gain of 6.2 percent. Albuquerque’s industrial market experienced positive net absorption of more than 261,000 square feet during the fourth quarter of 2017. This was the highest net absorption since the fourth quarter of 2015, and the second-highest …

August 28, 2018

Market Reports New Mexico Retail Western Western Market Reports

New Mexico’s Retail Market Gives Steady Performance

by Taylor Williams August 21, 2018

The New Mexico commercial real estate market continues to be a safe play for owners and developers in the Southwest. Albuquerque, which contains 50 percent of the state’s population, continues to drive the market with more than 80 percent of the commercial real estate transactions. A moderate supply-demand imbalance currently exists. This imbalance will allow vacant real estate to be matched up with occupier requirements relatively quickly, taking the vacancy rate lower or continuing to place upward pressure on the need for new construction. The New Mexico market, like many others, has experienced little to no development on the periphery of the city. Instead, owners and occupiers remain focused on the core areas of the market where density can be increased for a more efficient use of retail or office space. Albuquerque’s tech sector is also picking up momentum through the organic growth of existing companies and a large push from the University of New Mexico in partnership with the business community. New Mexico has one of the highest per capita concentrations of doctorate degrees in the U.S. The vacancy rate for retail space sits at 12.5 percent as of the first quarter of 2018. The outlook will be trending …

August 21, 2018

Market Reports Multifamily New Mexico Western Western Market Reports

New Companies Bring Larger Needs for Multifamily Housing to Albuquerque

by Taylor Williams August 14, 2018

Albuquerque is a hidden gem. It isn’t a huge market when compared to places like Seattle, Austin or Denver, but that doesn’t mean there isn’t room for growth and development. The Urban Land Institute predicts Albuquerque’s development will trail other metros with stronger economies in 2018. But there are positive trends and developments for Albuquerque and the surrounding areas, which can make us competitive. A new Facebook data center was built in Los Lunas, a 30-minute drive from Albuquerque. This has created new jobs for the Los Lunas and Albuquerque areas. Anywhere from 800 to 1,000 workers go through the data center every day, and 80 percent of them are from New Mexico. The center will have a $2 billion impact on the state and metro areas, leading to more jobs and opportunities for the region. Albuquerque will also take part in the “Facebook Community Boost Program.” The program helps the community by offering free workshops, business training and networking to boost careers. More companies like Facebook can be recruited to New Mexico as long as we make the area business-friendly and retain talent so everyone can succeed. With more jobs and opportunity, there will be an immediate need for …

August 14, 2018

Market Reports New Mexico Office Western Western Market Reports

Albuquerque’s Office Market Struggles to Recover

by Camren Skelton June 13, 2017

The New Mexico office market heart is found in Albuquerque. During the first quarter of 2017, the Albuquerque office market has seen an increase in activity from local companies looking for newer and updated spaces, but not necessarily more space. The office market has been the last to see any type of recovery after the recession. The vacancy rate remains steady at about 21 percent. Continuing through 2017, we anticipate moderately positive absorption. Albuquerque remains over-built and under-demolished, with many office buildings being functionally obsolete. Other than two new, build-to-suit medical buildings, one being 43,000 square feet and the other being 90,000 square feet, there are not any planned speculative office buildings. State Farm recently announced it will vacate 35,000 square feet and move its call center operations to Arizona. A multi-market, healthcare administration office has downsized from 67,000 square feet to about 25,000 square feet. These shifts will yield two properties with large contiguous spaces, an excellent opportunity for tenants with large space requirements. However, there are fewer opportunities for those looking for updated spaces. There are currently less than 10 modern office buildings for lease or sale. As such, modern Class A office buildings continue to have high …

June 13, 2017

Market Reports Multifamily New Mexico Western Western Market Reports

Albuquerque Multifamily Prices Rise on Heels of Rental Rate Increases

by Camren Skelton June 6, 2017

The New Mexico multifamily market, more specifically Albuquerque, recorded an impressively strong 2016 with vacancies dropping below 5 percent. Asking rents have increased for three consecutive years, fueling the investment market both in volume and prices. Employment grew by 2,700 jobs in Albuquerque last year. More than 2,000 of those were added in the fourth quarter, making it the strongest employment growth quarter in more than four years. Mining, logging and construction led the way in job creation, growing their sectors by nearly 8 percent. Professional, business services and the hospitality sector also strengthened on the job front. This expansion drove demand for multifamily units, pushing vacancy downward. The vacancy rate in Albuquerque declined 60 basis points in 2016, following a 100 basis point drop in 2015. Rents dropped slightly in the fourth quarter, but year-end 2016 asking rents were up 4 percent over 2015 to an average of $776 per month. Rent growth in the area has averaged 2.7 percent per year since 2014. Developers stepped up to the plate in 2016, answering the demand for more units. The market received 675 new units with about 1,000 more currently under construction. One of the new highly anticipated projects is …

June 6, 2017

Market Reports Multifamily New Mexico Western Western Market Reports

Millennials Lead the Way in New Mexico’s Multifamily Market

by Nellie Day June 2, 2015

Multifamily housing is coming of age in New Mexico, and the Millennial generation is spurring the growth. The old adage of “location, location, location” is ever present as the placement of a property in relation to cultural, educational, entertainment and natural amenities becomes a major factor in the value of the property. The ability to walk and bike to social amenities like restaurants, theaters and schools is, and will continue to be, very high on the list of importance for members of this generation in New Mexico. There is not only a distinguishable difference in occupancy rates for units scoring high on Millennial’s wish lists, but the income for these units is between 20 percent and 24 percent higher than those with lower scores. While newly constructed and refurbished multi-housing units often appeal to Millennials, all of New Mexico is experiencing high occupancy rates throughout the multifamily market. This push on availability is fueling an environment that will continue to encourage increasing rents and new construction. Though the sale of multifamily properties was deeply affected by the recession, a market shift in 2013 has allowed the multifamily market to regain its footing with a two- to three-times increase in sales …

June 2, 2015

Industrial Market Reports New Mexico Western Western Market Reports

New Mexico’s Industrial Market Looks for Solid Footing

by Nellie Day May 26, 2015

The industrial market had a notable year in 2014. Vacancy declined 270 basis points from the first quarter of 2014 where nearly 1 million square feet of space was absorbed. It has been more than seven years since absorption has registered similar figures. The primary factor driving last year’s success was a handful of large deals with more than 50,000 square feet. The supply of larger, quality spaces was steadily leased up throughout the year. These accounted for 54 percent, or 522,000 square feet, of absorbed space. Market velocity slowed down during the fourth quarter, driven by a lack of quality inventory. Absorption registered a positive 103,000 square feet, and was the lowest quarterly level of 2014. The centrally located North I-25 submarket outshined all other submarkets. In the biggest deal of the quarter, Flagship Foods occupied nearly 79,000 square feet of space in the North I-25 submarket. There were also nine other spaces occupied in this submarket that contributed another 60,000 square feet of absorption. A developing concern for 2015 is the significant amount of new available space being brought to market. Although still occupied, a total of 244,000 square feet of new space was added to the inventory …

May 26, 2015

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