Archives for July 2015

Thanks to all of the brokers, sponsors and guests who attended the July 2015 CCIM NM Deal Making Session and to those who shared the July 2015 CCIM NM Properties. Over 18 million dollars of commercial real estate properties available for sale were presented from all over New Mexico.

	Name	Property	Price
1.	Jim Wible CCIM & Keith Meyer CCIM, SIOR	NWC Desert Willow Rd. & Palmilla Rd., Los Lunas 87031	$794,300
2.	Anne Apicella	8100 2nd St. NW	$1,300,000
3.	Brent Tiano CCIM	2206 Sun Ranch Village Lp. Los Lunas 87031	$749,500
4.	Steven J. Quant CCIM	881-883 Lead Ave. SE	$1,420,000
5.	Cheryl Bonner & John M. Henderson III, CCIM	101 Hospital Loop NE	$207,000
6.	Anne Apicella	290 E. Avenida Bernalillo	$349,000
7.	Jim Wible CCIM & Dave Hill CCIM	1903 A Edith Blvd.	$240,000
8.	Jim Wible CCIM & Dave Hill CCIM	1903 B Edith Blvd.	$850,000
9.	Dan Newman SIOR & Debbie Dupes CCIM, CPM	4001 Jefferson Plaza NE	$5,300,000
10.	Todd Clarke CCIM & Bill Shattuk CCIM	400 Horseshoe, Deming NM	$2,935,000
11.	Cheryl Bonner & Brent Tiano CCIM	2633 Dakota St. NE	$649,500
12.	Cole Flanagan CPA, Rich Diller CCIM, SIOR, Clayton King	911-914 E. Main St., Farmington, NM	$4,390,000

Housing on both the ownership and rental sides is in a reset mode.
The most telling sign of a reset has been the plunge in the homeownership rate, which dropped in the Albuquerque metro area from a high of 70.5 percent in 2007 to 64.4 percent in 2014, according to the Census Bureau.

Nationwide, it dropped from a high of 69 percent in 2004 to 64.5 percent last year.
The plunge in the homeownership rate is obviously the result of the Great Recession, which was rooted in the lax mortgage lending that enabled the housing bubble of the mid-2000s and the collapse that followed.
“We’re suffering from post-traumatic stress syndrome in housing,” said Chris Herbert of the Joint Center for Housing Studies at Harvard University, which recently released a report titled “The State of the Nation’s Housing 2015.”
(Russ Ball/Journal)
The reset in housing is also driven by what could become a seismic shift in the age groups that drive housing demand.
The baby boomers, the huge population bubble born in 1946-64, are at an age where they’re becoming niche players in the housing market. The millennials, another huge population bubble born from 1985-2004, are a sleeping giant when it comes to housing demand.
In between the boomers and millennials are Gen-Xers born from 1965-84, which were low-birthrate years. The Harvard report singles out Gen-Xers as the demographic left holding the bag when housing collapsed.
Because they were in their prime home-buying years at the time, Gen-X homeowners were most likely to have little or no equity when the recession hit and home prices dropped. They were in the cross hairs of the foreclosure crisis that escalated nationwide in 2007 and in the metro in 2009.
As a result, the homeownership rate for 35-49-year-olds is currently about 5 percentage points lower than it was for the same age group 20 years ago. Their reduced participation in homebuying is a big reason why the so-called “move-up” market is still weak in most places.
“They watched the downturn of the recession and learned,” said John Garcia, executive vice president of the HBA, the homebuilders’ association in the metro. “They’re going to be cautious, more conservative.”
The reduced participation by Gen-Xers in homeownership “should point to pent-up demand,” said Janice McCrary, executive vice president of the Greater Albuquerque Association of Realtors, or GAAR.
Other dynamics negatively affecting homeownership include the steady erosion in household incomes – HUD’s current median income for the Albuquerque metro is lower than it was five years ago – and more rigorous mortgage lending standards, according to the Harvard report.
The income erosion has led to an increase in households classified as “cost-burdened by housing,” meaning they spend 30 percent or more of their net income on a mortgage or rent plus related costs, such as utilities, according to last year’s state of the nation’s housing report.
In the Albuquerque metro, the 2014 report said 36.4 percent of households were cost-burdened by housing, slightly higher than the national average of 35.3 percent.
Brian McCarthy of Abrazo Homes noted that boomer retirements or reduced roles in the workplace “will expand professional upward mobility for wage growth of the Gen-Xers and millennials.”
While the metro’s homeownership rate has fallen in step with the rest of the country, the local apartment market has not seen the corresponding increases in occupancy and rental rates experienced in much of the rest of the country.
Albuquerque’s apartment occupancy rate was 93.7 percent in the first quarter, compared to an average rate of 95.5 percent nationwide, said Jay Parsons of Carrollton, Texas-based MPF Research. The metro’s rate has lingered around 94 percent for the past couple of years.
The average monthly rent in Albuquerque was $740 in the first quarter, increasing year over year by the biggest margin in three years at 2.8 percent, he said. Nationwide, the average monthly rent was $1,186, a year-over-year increase of 4.6 percent.
“All in all, Albuquerque is more steady and slow than what we’re seeing across the country in terms of occupancy, rents, supply and demand,” Parsons said. “It’s not necessarily weak numbers, but not as strong as we’re seeing nationally.”
What really sets Albuquerque apart from most other metros is the lack of significant new apartment construction.
“Apartment construction is a big story nationwide,” Parsons said. “We’re building at a level not seen in 25 years.”
Over the past 10 years, DataTraq reports that permits were issued for only 4,494 multifamily housing units in the metro. The biggest single project involved 280 units. For comparison, 6,613 units were built in 1994-97, which was the last apartment construction boom.
Both here and nationwide, new apartment construction is undertaken in one of two ways. Projects either use federal low-income housing tax credits, which result in income restrictions for tenants, or are designed and built for the top, so-called “luxury,” end of the market.
Due to rising land and construction costs, it’s almost impossible to build to the middle of the market anymore. The rationale is that the supply of mid-priced apartments will recharge as existing properties get old and thus command more moderate rents.
Apartment owners and managers in Albuquerque are closely watching both local job growth and emerging trends in the apartment business, said Kelle Senyé of the Apartment Association of New Mexico.
“I think we’re cautiously optimistic,” she said. “I don’t think we’ll rush into new construction. When the time comes, we’ll be more strategic about it.”
The apartment market may be flat in terms of occupancy due to competition from single-family rental homes, which make up more than a third of rental housing at the national level.
The inventory of single-family rental homes grew during the bust when investors paid bargain prices for homes in some form of distress, such as in foreclosure or repossessed by the mortgage lender. These investment purchases propped up the market during the darkest days of the bust.
Single-family rentals appear to be registering higher rent growth than, on average, the for-sale market is seeing price growth, said Joe Gilmore, a partner in Coldwell Banker Legacy.
The market for existing single-family homes, as tracked by the Greater Albuquerque Association of Realtors, appears to be slowly returning to what might be called normal.
“This is a reset, not a rebound,” said GAAR President Paul Wilson.
Here’s a look back at how the annual median price for a single-family home, both detached and attached, has gone up and down from 1999, when it was $126,500, to 2014, when it was $172,785. Median means half of the homes were sold for a higher price and half for a lower price.
• In the pre-bubble years of 2000-03, the price increased by a very modest 1.8 percent a year.
• The 2004-07 bubble registered price increases of 10.4 percent a year, a rate of appreciation never seen before in the metro.
• The 2008-11 bust saw the price drop by 3.7 percent a year, a four-year slide that once again had never been seen before in the metro.
• The 2012-15 recovery has eked out gains of 1.8 percent a year, which is the same rate of appreciation as the pre-bubble years.
Today’s housing market, with all its variables, is evocative of the late 1970s and early ’80s when boomers were coming into their own during uncertain economic times, noted both Janice McCrary and Paul Wilson of the Greater Albuquerque Association of Realtors.
Homebuilding was in a major lull at the time, held down by mortgage interest rates that Fannie Mae records show topped 18 percent in the fall of 1981. The national unemployment rate topped 10 percent in 1982-83, higher than it got during the Great Recession.
Dubbed the “Me Generation” by noted author Tom Wolfe, the boomers had strength in numbers and, as a whole, were redefining the rather restrained consumerism of their parents into something closer to conspicuous consumption.
For all their rebellious noise, however, they tended to embrace their parents’ ideal of a home in the suburbs.
Echoing sentiments expressed in pro-growth forums, the HBA’s Garcia and Brian McCarthy of Abrazo Homes believe the Albuquerque metro has great potential to be a boomer retirement destination.
By: Richard Metcalf (Albuquerque Journal)
Click here to view source article.

Santa Fe Place mall, on the city’s south side, underwent a major overhaul and a name change a decade ago, but has struggled since then to keep tenants in its storefronts, both large and small. The mall is now trying to lure two major retailers, Cost Plus World Market and Bed, Bath & Beyond, and plans a renovation project to accomodate them. Clyde Mueller/The New Mexican
The Santa Fe Place mall, which has struggled in recent years to keep its storefronts full following a massive overhaul and name change a decade ago, is pursuing two new major retail tenants already located in the city: Cost Plus World Market and Bed, Bath & Beyond.
The move, which is not a done deal, would be good news for the mall — which underwent an interior face-lift just last summer and plans another improvement project that’s tied to the proposed new anchor tenants. But the change would leave another gaping hole at the Sanbusco Market Center in downtown Santa Fe. Cost Plus World Market opened a 14,700-square-foot store at Sanbusco in 2000 and has been one of the biggest tenants at the center, which has faced financial difficulties in the last couple of years, following the loss in 2011 of a Borders bookstore in its largest retail space.

Online videos describe it as an old insane asylum – haunted by the victims of botched surgeries and other accidents.
Teenagers like to explore the place at night, neighbors say.
Now Bernalillo County wants to buy it.
County commissioners agreed unanimously last week to authorize negotiations for 17 acres in the North Valley – once home to the Sandia Ranch hospital – for about $1.9 million.
The plan is to demolish the buildings, or what’s left of them, and make the land available for use by the Parks and Recreation Department. An aquatic center, agricultural demonstration site or something similar are among the possibilities.
“I think it’s a site we should acquire, clean it up and make it a resource for the community,” Commissioner Debbie O’Malley said in an interview.
The property certainly has some mystery to it.
At least two videos posted to YouTube carry footage of a dilapidated, graffiti-covered building – with captions that describe the Sandia Ranch hospital as an abandoned insane asylum. In one video, scenes of mental patients being operated on are interspersed with photos of the building, as Pink Floyd’s “Comfortably Numb” plays in the background.

A third video includes the “insane asylum” on a list of haunted properties in New Mexico. The videos are posted under screen names that don’t make it clear who took the footage.
The property is on Edith just north of Osuna. From the road, it looks like an overgrown lot.
“The teenagers kind of view it as a spooky place,” said R.J. Marney, president of El Camino Real Neighborhood Association.
Chris Christy, who has lived down the street for 40 years, said she doesn’t think the property is haunted, just run-down.
The county, she said, would “make a much better neighbor.”
Marney said the neighborhood’s goal is simply to make sure that whatever happens to the property is compatible with the neighborhood, which lies along a section of Edith Boulevard that was once El Camino Real, or the “Royal Road,” which connected New Mexico to the outside world.
06.29.2015/Roberto E. Rosales
Pictured are the remains of an old building located near 6903 Edith Blvd that the city is interested in buying.
Albuquerque, New Mexico(Albuquerque Journal)
“We don’t want to see any heavy commercial or industrial uses in the neighborhood,” Marney said. “We’d like to see the historical value of the neighborhood preserved.”
The county identified the owner of the property as David Gonzales. He didn’t return a telephone call seeking comment.
Final approval of the purchase is expected to come back to the County Commission later this summer, perhaps in August.
The county appraised the property at roughly $1.7 million, and Gonzales has submitted his own evaluation contending that it’s worth $2.7 million.
But the two sides have agreed on $1.9 million. The county would pay the $121,000 demolition cost as part of the $1.9 million agreement.
“The commission has to decide if they agree it would be a good thing for the community,” O’Malley said. “The property has been problematic. I think neighbors see it as blighted.”
She said she would like to see a community process to help plan use of the property.
“Large parcels like this aren’t easy to come by,” she said.
Christy said the property was once a sanitarium for people with tuberculosis, then a sanitarium for people with mental illness and later a retirement home.
But is it haunted?
“I think this has just become a ratty little place,” Christy said.
By: Dan McKay (Albuquerque Journal)
Click here to view source article.