Office Market Remains Steady in Albuquerque
By Jordan Shipley, Associate Broker, Allen Sigmon Real Estate Group
Lease rates are up and vacancy is down, two important things all landlords want to hear. For office landlords in New Mexico, these are two promising trends that have continued for the past few quarters to round out 2019. Average asking rates in Albuquerque came in at $18.76 per square foot, full service, according to Collier’s fourth-quarter 2019 Albuquerque office market report. Colliers also noted this was the first time average market rates have stayed above $18 per square foot for three consecutive quarters. This is currently the highest-recorded asking rate on record for the market.
Office users that are relocating are shrinking their overall space with fewer hard-wall offices and more collaborative work areas. With this trend comes ability to use tenant improvement money in different ways than simply walling off an office for each employee. Some of this money can now be spent on amenities like coffee bars, modern finishes, and wellness features, such as showers for those who bike to work or exercise at lunch.
Collaboration is also extending beyond the demising walls of the office space as mixed-use projects become more popular. Winrock Town Center and Uptown Tower, two significant mixed-use projects in the Uptown submarket of Albuquerque, are working to create a large live-work-play experience.
Goodman Realty Group, owner of Winrock Town Center, recently signed New Mexico Orthopedics to occupy 68,000 square feet at the project. This space will be home to about 250 employees who will see up to 700 patients a day. In the past year, Winrock Town Center has had Sketchers, Men’s Warehouse, Crackin’ Crab, Burger 21 and Chuze fitness all open.
Uptown Tower LLC, ownership of Uptown Tower, acquired the office building and surrounding parcels from an out-of-state owner. The existing building of more than 100,000 square feet has seen significant exterior improvements. It has an opportunity for a retail or office user to have the western portion of the site developed. The ownership also has plans to develop a residential site to the east of the existing building. It is in the early stages of that development process. Uptown Tower recently signed Intera Incorporated, which will occupy almost 17,000 square feet later this year. In just the first year, this building has gone from 45 percent to 84 percent occupancy due to local owners who are offering a healthy tenant improvement allowance, affordable market asking rates, and continuous plans to renovate and develop the project.
New Mexico is continually growing. The latest office reports are evidence of this growth thanks to local ownership groups who are acquiring and re-developing properties to reach the full potential of serving New Mexicans in the greatest way possible.