ALBUQUERQUE, N.M. – Albuquerque office space continues to drop in vacancy, according to the latest quarterly report from CBRE. And the city’s retail scene saw it biggest building in five years.
The city’s office space saw its third-highest net absorption in the past decade, thanks to two large transactions — Western Sky Community Care taking up 60,455 square feet in the far Northeast Heights and Systems Integration occupying 23,467 square feet. Both are new to market and moved into existing vacant space.
The city’s office vacancy rate dropped to 19.2 percent in the third quarter, down from 20.4 percent in Q2.
Albuquerque’s retail sector saw positive activity with the largest freestanding retail building in five years. Floor & Decor opened its 75,000-square-foot space off of Interstate 25 in September. The city’s second-biggest freestanding retail building was Cabela’s 70,000-square-foot store, which opened last year and is a Deal of the Year finalist. Stores like Toys R Us, Sears and Kmart closed their doors in Q2, vacating over 277,000 square feet, pushing up the city’s retail vacancy rate to 11.7 percent from 11.2 percent in the previous quarter. Those closures caused the market to have a negative net absorption in the third quarter, usually a time when net absorption goes up, thanks to multiple temporary Halloween stores that occupy empty big box spots. Halloween stores absorbed 121,000 square feet this season.
Other notable moves in Q3 include the state acquiring Pinetree Corporate Center’s 200,000 square feet for a New Mexico Children, Youth and Families Department center.
On the industrial front, the city saw a vacancy rate drop to a 10-year low of 4.9 percent due to a tightening market. The largest industrial transaction in Q3 was Fidelitone expanding its order fulfillment space to 64,000 square feet from 39,407 square feet. Albuquerque’s industrial real estate market remains tight as no new supply entered the market. The last industrial build was in 2011, according to CBRE.
By: Christopher Ortiz – Managing Editor, Albuquerque Business First | Nov 6, 2018