Land/Industrial Q2 2020 Market Report
The impact of COVID-19 on industrial real estate remains ambiguous. Vacancy and lease rate figures for the second quarter of 2020 remained stable while leasing activity mirrored preceding quarters.
Noteworthy among recently executed leases is a new construction, 5,100 square foot office/warehouse located at 3301 Candelaria Rd. The asking lease rate of $9.00 per square foot NNN is 20% higher than the median rate for NNN leases in Albuquerque. The property was quickly absorbed and evidences that tenants active in the market for industrial space are able and willing to pay more for higher quality buildings.
Another noteworthy development in Albuquerque’s industrial real estate market is the recent announcement by Amazon that the company is building a 465,000 square foot fulfillment center in Albuquerque’s Southwest Mesa.
Median lease rates on a Triple Net (NNN) basis remained stable at $7.50 per square foot. This figure falls short of the threshold for new construction, around $8 per square foot NNN, though recent leasing activity indicates rates in the $8 - $9 range are not outside of the market.
Median lease rates on a modified gross basis are up slightly from the previous quarter at $9.28 per square foot.