Quarterly Reports

Affordable real estate prices, a low cost of living and doing business, and a great quality of life are making Albuquerque a key destination for money makers and commercial property investors in the second quarter of 2021.
And the market shows no signs of slowing down, with homes going for record high prices and newly-listed property going under contract in less than 30 days which means more rooftops to fuel needs for retail city wide

To view the full Q2 2021 Retail Market Review, click here

 

The Retail Team Q2 market research and data is compiled by NAI Sun Vista’s Information Strategist, Frankie Hermosillo. Frankie assists in the identification, evaluation, and monitoring of investments as well as researches and maintains databases of economic and real asset-specific market data/metrics.

The second quarter of this year made three things clear to us: 1. Good opportunities have to be taken advantage of immediately; 2. Businesses must renew or they will not be in business; and 3. Life and business goes on after COVID-19.

Click in here to find out why we believe the City Different will continue to be much different with great commercial & residential projects in the pipeline for the third quarter.

Summary

One full year into the COVID-19 pandemic, the industrial real estate market continues its strong run, despite disruptions to just about every other industry in the US economy.

Vacancy rates have largely remained flat, though the current rate (2.29%) is roughly 0.4% less than it was 12 months ago (2.70%).

Lease rates—after a lengthy wait—seem finally to be trending upward with the median modified gross rate seeing 2.30% growth over the last 12 months and the median triple net (NNN) rate increasing 2.36% over the same period. While modest, this positive trajectory will hopefully promote new construction of industrial space that will restore vacancy rates to healthier, more sustainable levels.

Several local developers are working to fill the void with new projects underway in the Albuquerque MSA including 7200 Bluewater Rd. NW, a 150,000 square foot speculative bulk distribution facility near Unser and I-40 and 1533 Stephanie Rd. SE, a 21,000 square foot speculative multi-tenant office/warehouse project in Rio Rancho. As of this writing, the property is 89% pre-leased and set to be completed in mid-April 2021.

Other developers should take notice—the market is hungry for projects like these.

Click here to download the full Q1 Market Report

The Land and Industrial Q1 market research and data is compiled by NAI SunVista commercial real estate land and industrial specialist, Riley McKee. Riley advises industrial and logistics real estate owners and occupiers on leasing, acquisitions, and dispositions.  

 

 

 

Summary

We leave behind a year with challenges and step into 2021, fresh with opportunities thanks to the distribution of vaccines and a gradual return to normalcy. If the first quarter of 2021 looked this good, we are sure the second will be even better.

Click in here to get the latest on how film and art in Santa Fe are adapting to a post-pandemic situation, as well as how retail, office, land, industrial and multifamily categories are shaping up.

To view properties in the Santa Fe market, click here.

Or get to know our Santa Fe advisors: Carlos Garcia and Joel Complido.

Summary

As 2020 falls into the rearview, we can dive into the numbers of the retail market during the last four quarters and see how Albuquerque has handled the pandemic.

No one was able to foresee what would happen to the real estate market nationally or locally. Retail real estate was hit the hardest with most New Mexico businesses forced to close completely for a period of time or significantly reduce capacity. The industries most affected in New Mexico have been entertainment, sit-down restaurants, and tourism/hospitality.

This trend is seen across the United States. The categories least affected by the pandemic include grocers, hardware stores, and other essential needs retailers. Many drive-thru restaurants saw sales increase by pulling business from sit-down concepts.

To view the full Q4 2020 Retail Market Review, click here

The Retail Team Q4 market research and data is compiled by NAI Maestas & Ward commercial real estate retail specialist, John Algermissen.   John  specializes in the retail asset class, representing some of the most notable shopping centers across Albuquerque, assisting leasing efforts to stabilize or maintain stability with assets, and consulting with investors on healthy tenant mixes.

Summary

Nine months after COVID-19 unexpectedly disrupted a previously strong economy, the industrial real estate market so far has not been negatively impacted. The vacancy rate—effectively unchanged from this time a year ago—continues to hover between 2-3%.

Several large transactions were completed in Q4, including 2121 Claremont Ave. NE, (38,872 SF), 3921 Academy Parkway N. NE (35,020 SF), and 5950 Office Blvd. NE (20,255 SF). Along with a host of smaller transactions, a healthy slate of activity to finish the year has resulted in today’s record low vacancy rate of 2.24%.

Unfortunately, downward pressure on the vacancy rate has not lead to notable increases in lease rates. Robust activity in the owner-occupied real estate market due to competitive lending terms is one among many potential explanations for stalled lease rate growth. Median lease rates on a triple net (NNN) basis are down slightly from the previous quarter with December figures at $7.50 per square foot, down $0.25 from the end of Q3.

Median lease rates on a modified gross basis have flatlined, consistently bubbling between $9.00 and $9.28 per square foot throughout 2020.

Click here to download the full Q4 Market Report

The Land and Industrial Q3 market research and data is compiled by NAI Maestas & Ward commercial real estate land and industrial specialist, Riley McKee.    Riley advises industrial and logistics real estate owners and occupiers on leasing, acquisitions, and dispositions.  

 

 

Summary

Without a doubt, 2020 has been a unique year that no one could have ever anticipated. Who would have ever thought that big-box giants like Target, Smiths, and Walmart would have to close for a period? That hotels would have such dramatic drops in reservations that they would consider closing? Or that small local businesses would be the unintentional main target of lockdowns. This sounds like a lot of bad news; however, not everything about 2020 was bad. There are always opportunities that can be taken advantage of, even during a world-wide pandemic.

To read the full Santa Fe Market review, click here.

To read the December 2020 Santa Fe Multifamily report, click here.

To view properties in the Santa Fe market, click here.

Or get to know our Santa Fe advisors: Carlos Garcia and Joel Complido.

by Shelly Branscom, CCIM 

COVID-19 may not be going away soon, but that has not prevented the U.S. economy from rebounding. Americans are learning to live with COVID. Progress has been slow, and medical personnel are learning how to manage the virus while nursing the majority of its victims back to health.

The nation is on its way to overcoming the biggest challenge we have faced since World War II. Americans are eager to return to work following the spring lockdowns. Precautions to reduce the spread of the virus are becoming second nature, resulting in the job market rebounding more quickly than anticipated. Third quarter GDP growth is expected. Finally, third quarter profits for companies in the S&P 500 were 23% better than Wall Street analysts forecast – a reflection of the resilience of American businesses.

Although it may be a long and uneven recovery, the economy is once again growing! Resourceful Americans and business owners will enable it to remain that way! We are experiencing significant business and investment optimism, and most businesses are reporting they need to hire new employees in the next three months.

In Albuquerque, the office and industrial real estate markets remain robust! Business owners are taking advantage of the low interest rates and buying real estate. When the lease rate they were paying is higher than the loan payment on their new mortgage, why not?  Landlords continue to report tenants are making their lease payments, enticing investors to continue to infuse their cash into New Mexico’s commercial real estate.

At a COVID-safe gathering of several Albuquerque brokers recently, those in attendance reported they are busy helping tenants renew or expand while assisting buyers with purchasing commercial real estate. Some in the group thought the office footprint will shrink with employees choosing to work from home. However, we all agreed there is a need for social interaction given higher productivity is reported when employees can collaborate at the office. I believe the office footprint will get bigger. While some employees will continue to work from home, others will need to be in the office. Those with compromised immune systems will require their own enclosed office where they are able to close the door should they deem it’s needed for health reasons.

We are social people. We are encouraged by the productivity of our fellow employees. We will all go back to the office, wash our hands and wear our masks. Both the job market and the economy will continue to rebound, and commercial real estate transactions will continue to come to fruition.

Shelly Branscom, CCIM is an NAI Maestas & Ward commercial real estate specialist who provides substantial long-term strategies and business planning services to her clients.  She prides herself on thinking outside the box, enabling her to contribute unique solutions and outcomes specific to each of her clients.  Learn more about Shelly and her listings.   

NAI Maestas & Ward is a full-service commercial real estate company serving New Mexico since 1996. The company is a dynamic commercial real estate firm offering best-in-class real estate services in brokerage, property management, asset management, business brokerage and development services.

Summary
The Albuquerque retail industry is shifting across the board due to the prolonged economic effects of COVID-19. This situation has caused vacancy levels to rise and asking rents to decrease throughout the retail sector.

In response to this “new normal,” restaurants have reconfigured their dining floor plans to accommodate for social distancing, outdoor seating and pickup/delivery services. Department stores as well as other retailers are adjusting to the increasingly competitive ecommerce
marketplace and doing what they can to adapt to changes in the marketplace.

Fortunately, some businesses such as discount retailers, medical, pharmacies, hardware stores, grocers and on-line retailers like Amazon are prospering in this environment. Multiple national resources indicate many QSR brands are doing record volumes thanks to drive-thru and takeout orders. Other less adaptable business models are not faring as well.

At the beginning of Q3, retail traffic in Albuquerque, NM was up 3.2% compared to the baseline period of February 1-23, 2020 (Pre COVID-19). Nationally, retail traffic was on average down 35.2% during that same period. In Albuquerque, NM, the Convenience Stores category had
the largest change, up 84%. (according to LocateAI Retail Tracker).

Barring a resurgence in coronavirus cases this fall, retailers are looking to the holiday season to bring some much needed relief as there appears to be continued strong consumer demand.

To view the full Q3 2020 Retail Market Review, click here

The Retail Team Q3 market research and data is compiled by NAI Maestas & Ward commercial real estate information specialist, Frankie Hermosillo.   Frankie assists in the identification, evaluation, and monitoring of investments as well as researches and maintains databases of economic and real asset-specific market data/metrics.

Summary

Santa Fe is growing steadily toward the south and southwest quadrants of the city. Residential projects, especially multifamily, have gained market velocity this year with four apartment communities near completion and three others under construction. Vizcaya III, Broadstone, Capitol Flats & San Isidro III are already leasing and are seeing strong activity. South Meadows Apartments, Markana de Santa Fe & El Camino Crossing are under construction. Four other projects are in the pipeline. The listed projects bring the total to more than 1,770 units that will come to market over the next 3 years. All this plus nine single-family residential development projects under construction.

Despite the fact that land is a long-term investment in terms of development, sales of commercial and industrial land in the last three months were strong on main thoroughfares such as Cerrillos Rd., Rodeo Rd. & Airport Rd. The third quarter closed with a median selling price of $6.76/SF with an average lot size of 5.28 acres. It is expected that by the end of 2020, even with the pandemic, the commercial land market will remain stable and with many new projects that will benefit the Santa Fe community.

To read the full Santa Fe Market review, click here.