The industrial ground is shaking and ready to explode. Activity has increased over the third quarter with a positive absorption of 357,186 SF. This is the largest absorption the industrial market has seen in over three years. Albuquerque’s extremely low vacancy dropped even further with a quarter over quarter decrease of 86 basis points from 5.20% to 4.34%.
In the third quarter, Netflix made Albuquerque’s biggest industrial announcement since Facebook. The internet television network purchased the 326,000 square foot facility at 5650 University Blvd SE. Netflix purchased the property as a 100% occupied investment sale. It is currently occupied by Albuquerque Studios, which will continue to occupy the property until the end of its lease term. As an investment sale, there was no absorption reflected in Mesa Del Sol’s submarket. Netflix will use the property as its principal production hub, the first of its kind in the United States. The state of New Mexico will contribute $10 million in LEDA funding, while the city of Albuquerque will contribute $4.5 million in LEDA funding. Netflix has stated that it will bring over $1 billion in production money to the state in the next 10 years, as well as creating over 1,000 production jobs. Netflix currently outranks cable tv in subscribers.
Key factors this quarter
- The inclusion of Valencia County in the Albuquerque MSA industrial inventory has added an additional 2,023,988 square feet, changing the vacancy from 4.01% to 4.34%.
- Netflix is under contract to purchase Albuquerque Studios at 5650 University Blvd SE. The internet television network plans to make Albuquerque its first United States production hub.
- The Albuquerque MSA currently has 1.3 million square feet of industrial space under construction. One million square feet of which is Facebook in Los Lunas.