Vacancy rates drop
The Albuquerque Downtown office market has seen quite a bit
of action over the last quarter. The sale of Alvarado Square was finalized, changing the Downtown vacancy dramatically. ART and Innovate ABQ construction projects are coming to a close and the longstanding Downtown crime rate has begun to be addressed by the city.
Alvarado Square represented 10% of the market’s first quarter vacant square footage, and nearly 25% of all the vacant space in the Downtown submarket. Now with the property being officially off the market, the Downtown availability has decreased significantly, equating to a drop from 31.7% to 24.3%, a 7.4% change. Vacancy remains unchanged from last quarter as the county has yet
to occupy the space. However, as the building will be both government owned and occupied, it has been removed from the statistics in this report. This accounts for the nearly quarter million drop in total office square footage. Though the occupancy of the building will no longer affect the reported vacancy, it is sure to boost Downtown’s overall density. This is very good news for the efforts to revitalize Downtown.
Key factors this quarter
- Downtown’s availability has decreased by 7.4% due to the government purchase of Alvarado Square, which will improve density and help efforts to revitalize Downtown.
- Downtown density will also be improved by the opening of the UNM Lobo Rainforest Building, which is scheduled to open in August. Along with student housing, several office users including Air Force Research Laboratory and UNM’s Science & Technology Corp. will occupy the building.
- Office users are using their spaces more efficiently, often moving into smaller spaces and leaving larger spaces vacant. Landlords are being pushed to consider demising their larger contiguous spaces