The New Mexico retail market is continuing to change in a positive manner, which bodes well for property owners and businesses. There are new national, regional and local tenants looking at this market, moving in and around the shopping centers of New Mexico. New shopping centers are being built, while existing shopping centers are being redeveloped and traded. Some of the most significant transactions include Columbus Pacific acquiring Sierra Vista Shopping Center in Albuquerque and moving Stein Mart and Hobby Lobby into a former K-Mart space. Pete Daskalos Properties has also purchased Four Hills Village Shopping Center on Central and Tramway in the Southeast Heights submarket. The center now has a new movie cinema, among other changes to its anchors and tenant roster. A K-Mart building at Rio Rancho at Hilltop Plaza Shopping Center was also sold after the store vacated. The new landlord is looking to re-anchor that space as well. These big box vacancies have created redevelopment opportunities for existing shopping centers located in established trade centers while rents are increasing as the larger spaces are subdivided and leased to other tenants. This has created momentum in the market and upward pressure on asking lease rates. Other retailers …
Market Reports
Southern New Mexico’s industrial market, specifically Dona Ana County, remained stable throughout 2013. We project solid growth in this arena for 2014. We have not seen much growth in the first quarter of 2014, though the industrial market has remained stable. Rents have also remained about the same. They have decreased in some instances as landlords compete for the few new tenants entering the market. Fortunately, Southern New Mexico has experienced an uptick as a few companies entered the market from different states, which is obviously a positive sign. A food processing company just signed a lease/purchase agreement for 40,000 square feet. This company will create 150 to 200 jobs, a significant amount for Dona Ana, which has a population of about 225,000 people. A majority of the growth has occurred in the Santa Teresa area. Union Pacific is wrapping up its 2,200-acre facility, where it has invested $500 million to create the largest intermodal inland port in the United States. Union Pacific’s Intermodal ramp, refueling and crew change station was fully operational in early April. This facility has the lift capacity to facilitate 220,000 intermodal containers annually. It will provide rail access from Mexico’s interior and Pacific Ports to …
The New Mexico office market has gained more traction and absorbed a healthy level of excess inventory this year. Vacancy fell to its lowest level in more than two years. This decline can be attributed to an absorption of vacant inventory and an increase in demand for medium-sized spaces. One of those purchases was carried out by the State of New Mexico, which acquired the 60,000-square-foot Plaza Maya, a vacant building that’s no longer competing for tenants. Downtown’s vacancy also declined when a 19,500-square-foot space was taken off the market by a new company that won the contract administering mental health services for the state. Some of the most popular office spaces seem to be in the size range of 4,000 to 25,000 square feet. The state has had more than 73,000 square feet of this kind of space absorbed recently. A new charter school in the Airport submarket accounted for about one-third of this inventory, with engineering, legal and healthcare administration service companies taking up the balance. Activity for smaller spaces of less than 4,000 square feet remained consistent with 2013 levels. This strong demand has led to larger Class A spaces being master leased by national executive suite …
Southern New Mexico's industrial market, particularly Dona Ana County, has remained stable through 2013. We project solid growth in this arena for 2014. A majority of the growth will be in the Santa Teresa area where Union Pacific is in the middle of a massive investment that will create the largest intermodal inland port in the United States. This project has already brought jobs and more than $40 million to New Mexico contractors so far. It is expected to create more than 600 permanent jobs in mechanical, electrical, architectural, utilities, track and civil engineering. Santa Teresa’s intermodal station has started to generate significant conversations with major companies for distribution and warehouse properties. Growth in Santa Teresa is further fueled by the proximity to the Mexican border where many of these same companies operate maquiladora plants on the Mexican side. We continue to struggle to meet demands for large-box users in Santa Teresa due to the limited availability of space in the area. This problem is compounded by the tight lending market, where little equity is available to developers looking to bring new speculative space on line. Additionally, many of the users looking in the Santa Teresa area typically do not …
The southern New Mexico industrial sector remained strong in 2011 and we expect 2012 to be a year of continued expansion and growth. The largest concentration of growth in the industrial arena has taken place in Santa Teresa and the immediate surrounding area. The industrial market in this trade area has benefited greatly from its proximity to the border with Mexico and work done by Gov. Susana Martinez in attracting industrial tenants to the area. We have also seen an influx of manufacturing companies that moved their operations to Asia who are now looking to relocate back in North America, specifically to those trade areas that benefit from a geographic link to Mexico. Large box property owners gained the most in 2011 with the recent expansion of companies and businesses locating in the area. In 2011 Alaska Structures leased about 350,000 square feet of industrial space on the west mesa in Las Cruces. The company occupied one of the last remaining big boxes in the market, leaving little available big box space in the greater Las Cruces market. While 2011 was a good year for large boxes, landlords for mid-size and smaller boxes felt the pinch as tenants were able …
Leasing activity in the Albuquerque industrial market has been inconsistent during the first half of 2010. The market cannot seem to sustain any positive momentum, with many starts and stops so far this year. As is the case in many other markets, there has been virtually no speculative construction in the Albuquerque industrial market in the past 2 years; positively, this trend has helped keep vacancy rates from rising even more than they have. The industrial market vacancy rate for Albuquerque is currently 9.4 percent, which is 1 percent higher than a year ago and more than 2 percent higher than 2 years ago. Albuquerque’s north Interstate-25 corridor continues to lead all submarkets with regard to overall leasing activity, capturing a full 85 percent of all leased space in the second quarter of this year. A significant transaction just completed in the submarket is the Southwest Regional Council of Carpenters’ 93,686-square-foot union training center at 3900 Pan American NE. Slower submarkets include the downtown area (13.3 percent vacancy) and the South Valley (15.4 percent), both of which have older inventory including buildings with functional obsolescence. The overall lack of demand for Albuquerque industrial space can be attributed in large part …
Since the beginning of 2009, six new office projects containing 254,000 square feet of space have been delivered. As of the second quarter, these projects were 53 percent occupied. This strong absorption came primarily from one tenant, Fidelity Investments, which moved into a 112,000-square-foot build-to-suit project designed to handle the firm’s human resources outsourcing work. This project was developed by Forest City Covington in Mesa Del Sol, a master-planned, mixed-use community located just south of the airport on a mesa overlooking the Rio Grande Valley. In a rare occurrence, no multi-tenant office projects were under construction during the second quarter. This is good news for these recently completed office projects. New speculative projects are likely to remain on the drawing board as developers face financing challenges with high pre-leasing requirements. The excess amount of unsold office condominiums on the market (approximately 300,000 square feet) may aggressively compete for tenants by offering lease-to-purchase options. The Albuquerque metro area is poised for growth during the next few years. It has earned some high rankings by national media, placing it among the top metro areas. The bottom line is the Albuquerque metro area is being discovered for its excellent climate, strong workforce and …
The proverbial good news–bad news scenario is at play when it comes to land values and transactions in Albuquerque, New Mexico. As always, the good news first. Albuquerque did not experience the effects of mammoth overbuilding and the resulting plummeting disintegration of value that has infected many other markets. The 180 degree reversal of values that commenced in the run-up to 2008 in areas like Phoenix and Las Vegas and continues as we write is in stark contrast to current Albuquerque price levels, where generally most commercial property and land in particular have suffered far less than in those areas and other markets nationally. There is, however, still bad news if you’re a local owner, prospective seller or broker trying to make a living in the land business. Historically Albuquerque has lagged behind most other areas of the country in economic timeline trends. If you subscribe to the theory that a housing sales slump is the precursor of a commercial real estate decline it’s easy to extrapolate why non-residential land here is beginning to experience a current decrease in demand. Current reports from appraisers and brokers in the residential subdivision business provide a gloomy picture of north of 10,000 lots …
The Albuquerque metro is maintaining a steady retail market. Keys to this steadiness include year-over-year positive job growth, consistent population expansion, low unemployment and a measured expansion of retail inventory since 2000. On the other side of the coin are two items of concern: some flatness in retailer sales figures and retailers being impacted by their stores in other marketplaces outside the Albuquerque metro. Albuquerque’s retail sector of 27.28 million square feet (measured from buildings equal to or exceeding 10,000 square feet in size) has posted a vacancy rate of 7.8 percent across all product types, down from 8.1 percent last year. Asking rents for new construction shop space are $20 to $28 per square foot per year NNN. In the Cottonwood Mall and Uptown submarkets, top spaces are in the $30 to $45 per square foot range. Asking rents for new mid-size and large space range from $16 to $20 per square foot per year and $12 to $16 per square foot per year, respectively. Active submarkets within the Albuquerque metro area are Uptown, Far Northeast Heights and the South Valley. In Uptown in the past 2 years, Coronado Mall and ABQ Uptown have welcomed the leading tenants in …
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