WESTERN SNAPSHOT, SEPTEMBER 2009

Albuquerque Office Market

1. MARKET MOVES

Since the beginning of 2009, six new office projects containing 254,000 square feet of space were delivered. As of second quarter, these projects were 53 percent occupied. The strong absorption was primarily from one tenant, Fidelity Investments, which moved into a 112,000-square-foot build-to-suit project to handle human resources outsourcing work. This project was developed by Forest City Covington in its master-planned, mixed-use community called Mesa Del Sol, located just south of the airport on a mesa overlooking the Rio Grande Valley.

2. MARKET MEASURE

In a rare occurrence, no multi-tenant office projects were under construction during the second quarter. This is good news for the recently completed office projects delivered in 2009. New speculative projects are likely to remain on the drawing board as developers face financing challenges with high pre-leasing requirements. The excess amount of unsold office condominiums, approximately 300,000 square feet, on the market may aggressively compete for tenants by offering lease-to-purchase options. 

3. THE MARK OF A MARKET

The Albuquerque metro area is poised for growth during the next few years. It has earned some high rankings by national media placing it among the top metro areas. U.S. News & World Report ranked it Number 1 for the “Best Places to Live” in 2009, and Kiplinger’s ranked it Number 2 in its “2009 Best Cities” ranking. Bottom line is the Albuquerque metro area is being discovered for its excellent climate, strong workforce and affordable living.

— Tim With is a senior vice president and principal at Grubb & Ellis|New Mexicoin Albuquerque.

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