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 …
New Mexico
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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