Higher quality gains
Compared to the previous two quarters, Albuquerque’s office market saw little movement during quarter three. The largest movement of the quarter was the 56,000 SF vacancy left by Brown Mackie College at Copper Point, one of several for profit schools to cease operation in this market over the last few years. This loss was the driving factor in the small amount of negative absorption for the quarter. Aside from the Brown Mackie College vacancy, transactions in office space were primarily small, typically less than 2000 SF.
Though movement was small over the third quarter, there were several larger renewal transactions. Many tenants were actively looking for new space, but found their current landlord very competitive with terms. This resulted in tenants renewing rather than relocating as landlord concessions removed much or any economic benefit for tenant relocation.
Key factors this quarter
Office tenants are renewing their current leases rather than moving to new spaces because terms are more favorable. New leases have been focused on smaller spaces, generally under 2,000 SF.
Healthcare is flourishing and active in the market thanks to stability returning to the political climate surrounding healthcare.
Numerous mixed-use revitalization projects and developments are in progress primarily in the Uptown and Downtown submarkets.