Office holds steady
Albuquerque’s office market has held steady along with the rest of the country throughout 2017. The year finished with a slight decrease in vacancy from 18.90% to 18.83%.
Two large suburban office properties traded toward the end of the fourth quarter. The biggest transaction was the sale of Horizon I at 8801 Horizon Blvd. Cauwels & Stuve Realty and Development, in partnership with other local investors, purchased the 130,000 square foot class A property. One Executive Center, a 114,500 square foot class B office property sold to Centurion Properties. Neither transaction had a direct impact on the quarter’s availability or vacancy numbers.
Substantial changes in vacancy for the quarter included sales at 10500 Montgomery Blvd NE and 435 Montano Rd NE, a new lease at Pinetree Corporate Center and 9600 Tennyson’s sale and addition to the office inventory. 10500 Montgomery and 435 Montano were both owner-occupant sales that yielded a combined 26,000 square feet of absorption in the Far Northeast Heights and North I-25 Corridor respectively. Also, 20,000 square feet of space in the University submarket was occupied at Pinetree Corporate Center.
Key factors this quarter
Albuquerque has seen an increase in co-working spaces, the trend is likely to continue with an increasing number of startups
New class A office inventory is on the horizon with new construction starting in 2018 and going into 2019
A strong economy and optimistic business owners have lead to an increase in sales of smaller office properties