The President of the Commercial Association of REALTORS® New Mexico provides a number of economic statistics regarding commercial real estate in New Mexico. Statistics are compiled by the statewide commercial listing service (called a CIE, not an MLS).
CARNM is the premier choice for commercial real estate in New Mexico. CARNM is the one location where you will find the most active REALTORS® focused on commercial real estate (comprising of retail, office, multi-housing, industrial and land), all at www.CARNM.com.
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Archives for June 2015
Google Says Its Titan Planes will Keep Flying
After a Titan Aerospace drone crashed, Google is saying that the company will keep developing its unmanned aircraft in the East Mountains.
A Titan Aerospace drone may have crashed, but on Friday Google said it will continue.
A Google spokesperson said Friday the drone that crashed on a small private ranch had a 40-meter wingspan. Titan, which was acquired by Google last year, is developing a new type of solar-powered unmanned vehicle that is intended to project Internet signals from the stratosphere to the ground.
“Titan has been working to develop and test a new kind of high-altitude, solar-powered aircraft that could one day provide Internet access from the stratosphere. Part of building a new technology is overcoming hurdles along the way. Although our prototype plane went down during a recent test, we remain optimistic about the potential of solar-powered planes to help deliver connectivity,” a Google spokesperson said in a statement Friday.
The company was started several years ago in Moriarty and is developing the planes at the small airport there. The planes are large, with the wingspan of a commercial jetliner, but are designed to fly for up to one year on solar and battery power. They Solara aircraft can fly at 65,000 feet, much higher than a typical jet.
By: Dan Mayfield (Albuquerque Business First)
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LCHCC: Las Cruces is Closed for Business
Las Cruces is closed for business!
That’s right. The City of the Crosses is now known throughout the United States as the city that does not welcome business. Recently, the Las Cruces City Council voted unanimously to deny a zone change to commercial at the intersection of Tashiro Road and Valley Drive. This was widely speculated to be a proposed Wal-Mart Neighborhood market. This is an extremely dangerous message being sent by those entrusted with the well-being of Las Cruces through their obligations as a representative of this city. It is clear that the councilors that denied this request were sadly influenced by some citizens and a chamber that clearly opposes growth within our beautiful city.
Apparently they, along with the leadership of this city, do not support a free enterprise market or the notion of competition breeding success.
Prior to this vote, an article published in the Las Cruces Sun-News stated the local government’s attempts to interfere with private business. This article was particularly concerning since the statements made by city staff made a very dangerous commentary of a potential saturation of grocery stores in the region.
On the surface, it is clear that the statement does not pair up with reality and is contrary to city policies that have been exacted on the people for years. The City staff and its progressive supporters have been promoting and requiring healthy living (i.e. walkable communities, multi-modal transportation, mixed-use developments, etc.). There are currently 0.13 grocery stores per 1000 residents in Doña Ana County – well below the studied threshold.
There are strong correlations between the density of grocery stores in a neighborhood and the nutrition and diet of its residents. The availability and affordability of healthy and varied food options in the community increase the likelihood that residents will have a balanced and nutritious diet. A diet comprised of nutritious foods, in combination with an active lifestyle, can reduce the incidence of heart disease, cancer, and diabetes and is essential to maintain a healthy body weight and prevent obesity. Low-income and under-served communities often have limited access to stores that sell healthy food, especially fruits and vegetables.
Moreover, rural communities often have a high number of convenience stores, where healthy and fresh foods are less available than in larger, retail food markets.
Do we really want to be known as the city that does not welcome business? Let’s strive to promote a friendly environment that is conducive for the success of local businesses and one that attracts and welcomes new businesses as well.
The Economic Forecast for the Second Half of 2015: A Single, Possibly a Double but No Homeruns
Despite GDP growth stalling in Q1, this time due to bad weather, a port strike on the west coast, a rising dollar and falling oil prices, the economic recovery remains intact. The poor performance of the US economy from January through March was aberrant, and the incoming employment, housing, and service sector data all point to a modest economic pickup. GDP growth the rest of the year should average 2.6%, with growth in Q2 closer to 1.75% as the economy slowly rebounds from a tough Q1. An expected pick-up in wages and oil exploration activity and possibly increased corporate spending on plant and equipment suggest that 2015 will probably improve as it progresses.
Despite falling energy prices, household spending has been very lackluster. As a result, savings rates are up and spending on durable and non-durable goods has been weak. Simultaneously, because the strong dollar has made US exports more costly abroad and imports cheaper here, manufacturing activity has slowed. And due to falling oil prices, oil exploration has plummeted, with just 646 rigs in operation, down from a high of almost 1,600 eight months ago. That said, rig counts have stopped falling and should start to rise as oil prices firm. Moreover, the labor market continues to strengthen. Voluntary quit rates are rising, the number involuntary terminations keeps falling, and job creation, while slightly down from last year, is strong. At this rate of improvement, there will be little slack in the labor market a year from now.
A definite economic bright spot thus far in 2015 has been housing, and that is due to rising household formation. After averaging roughly 1.2 million annually from 1983 through 2006, household formation averaged just 600,000 through September 2014. Since then, it has been rising at an annualized rate of 1.5 million. Add to this increasing credit availability, and housing starts should reach an annualized average rate of 1.175 million during the second half of 2015, with new single-family construction contributing at a pace of 775,000 units and multifamily adding 400,000. Despite being severely constrained by a lack of inventory, pending home sales are strengthening and existing home sales should continue rising by 6% annually as should home prices.
As for inflation, it’s benign but will likely slowly begin creeping up from its current anemic level. The strong dollar will not strengthen further and oil will not weaken more, thus the trends that have exerted strong deflationary pressures on imports and energy respectively should dissipate. Moreover, as the unemployment rate falls, labor shortages will become an increasing reality and that will cause wages to rise. This should help household spending and encourage corporate investment. However, slowly rising prices and wages, albeit from very low levels, will push the Fed to raise short-term rates late this year, probably in September but possibly in December. The Fed will then raise rates very slowly thereafter due to weak global growth. Long-term rates have bottomed and 10-yr Treasuries will end the year at close to 2.6% as the economy strengthens.
In short, the economy continues to grow modestly. Short-term rates will start rising in the fall, wages are showing nascent signs of rising, and residential construction activity looks to strengthen as we go into 2016. Most critically, continued solid job creation will keep the recent rise in household formation up and the likelihood of a recession during the next six months is zero.
Have a wonderful summer and see you in August! (Remember, I will not be writing an article in July).
By: Elliot Eisenberg (GraphsandLaughs)
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