CRE Outlook: Albuquerque offers unique opportunities
by Shelly Branscom, CCIM
Even with the new “stay at home” order New Mexico is under again, we continue to negotiate and close commercial real estate transactions in Albuquerque and across New Mexico.
Under the new Biden administration we can expect an increase in taxation of the wealthy. Although the removal of 1031 Exchange opportunities may be on the table, its effect will be on those making more than $400,000 in annual income. Biden is expected to move the dial in favor of stronger global climate action while committing to a zero-net emissions target date of 2050. Tightened governmental regulations around climate change will cause developers to incorporate new environmental standards while existing holders may be forced to retrofit their buildings. Introducing new environmental standards for construction will only increase our already high construction costs. Expect rising healthcare costs to impact employer wage decisions in the form of lower wages, increased insurance premiums or higher employee out-of-pocket costs. On a positive note, the pandemic has drawn attention to the life sciences sector which is expected to flourish!
Given that Albuquerque is a tertiary market, there are multiple companies and dozens of investors who have their eye on us and for several reasons. Our capitalization rates are more attractive than either of the coastal communities. Our commercial real estate rental rates are more economical than the states surrounding us. We are becoming known for our space flight capabilities at Spaceport America, and we have a multi-lingual employee base. And let us not forget our central United States location, our sunshine and the miles of hiking trails!
As we wind down this unprecedented 2020, we will also experience additional vacancy in our commercial real estate buildings as companies re-organize and re-prioritize their footprints. Office sublease space will become available, allowing the younger companies to enjoy Class A finishes with class B rental rates. Retailers will shutter their doors in the wake of governmental orders. Manufacturing and distribution continue to be on the rise while inventory is low. Industrial development is imminent.
No matter the change for you and your company, I am committed to providing you with answers to your commercial real estate questions. Interest rates remain low. If you need to place cash, opportunities abound.
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.