Albuquerque market’s expectations mixed

Saying the office market in Albuquerque "tends to thrive or dive with the job market," the Albuquerque Journal recently reported on the 2014 forecast for the city's commercial real estate industry.

"There are silver linings to everything and we can try to be optimistic, but the improvement we expect to see in 2014 is not going to be substantial," said John Ransom, managing director of Colliers International's Albuquerque office.

"We've been fortunate but too reliant on the government for jobs," he continued. "The question is what's going to be the next spark (in the local economy)?"

Ransom said the city's market isn't overbuilt, but rather "under-demolished," meaning facilities that aren't serving much of a purpose now are still standing and taking up land that could be better used by another company.

Mixed market
The Journal reported that the Albuquerque office market ended 2013 with a vacancy rate of 19.3 percent – up from 18.9 percent in the fourth quarter of 2012 and much larger than the average of 12.3 percent in 2005-08.

The office market in the downtown area is experiencing much greater struggles, ending 2013 with a vacancy rate of 29 percent, which is a slight improvement from 32.2 percent in the third quarter, but the number is still high enough to make downtown Albuquerque the leader in the highest vacancy rate of any downtown in the U.S. Expert Tom Jenkins, of Real Estate Advisors, told the Journal that the aging inventory in the downtown area is making it a less attractive location for many companies. 

The city's industrial market fared better, however, ending 2013 with a vacancy rate of 9.3 percent, which is less than 10.3 percent in the same quarter of 2012 and 9.9 percent in the third quarter of 2012.

I-25 eyed for growth
Terri Dettweiler, of CBRE, told the Journal that the North I-25 corridor in Albuquerque likely will be the location of much of the city's future growth. Members of the region's business association include banks, construction companies, staffing and manufacturing solutions companies, commercial real estate companies and Central New Mexico Community College's Workforce Training Center.

"The North I-25 (corridor) has the newer product – more energy efficient buildings, fiber (optics) and ample parking – with good access from both sides of the river," Dettweiler said.

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