Archives for July 2019

Casey Kuhlman, CEO of Monax, discusses positive impacts he predicts blockchain will have in real estate investment, development and in the market.

To build a truly robust entrepreneurial ecosystem that benefits everyone in New Mexico, a lot more marginalized, disadvantaged populations must be brought into the fold, WESST President Agnes Noonan told the Albuquerque Economic Forum Wednesday morning.

“We need to build a diverse and inclusive economy,” Noonan told prominent business and nonprofit leaders, economic development professionals and politicians. “We need to democratize access and opportunity to entrepreneurship.”

That’s been WESST’s focus since launching in 1989. The nonprofit, celebrating its 30th anniversary this year, provides education, technical assistance and other services to small business people across the state. That includes training through classes and workshops, one-on-one consulting and mentoring, access to capital and company incubation.

From the start, WESST — which stands for Women’s Economic Self Sufficiency Team — has concentrated on disadvantaged groups and under-served communities.

It’s provided assistance to 39,000 people throughout New Mexico since 1989, helping entrepreneurs start 2,528 businesses and creating nearly 5,000 jobs. Of those receiving assistance, 65 percent are women, 60 percent people of color, and 65 percent low-wealth individuals, Noonan told Forum participants.

But a lot more is needed to reach existing and aspiring entrepreneurs from diverse populations, Noonan said. And that requires a broad, collaborative community effort to fill in widespread “gaps” in access to resources, services, and affordable funding.

It also means bridging local language barriers to embrace Spanish speakers, who represent 30 percent of the population. And it means building “social capital” for disadvantaged individuals to connect with community networks and build business relations.

“For many of us, we just pick up a phone and make a call,” Noonan said. “But many people don’t have those business connections in the community.”

Efforts should especially focus on small businesses with less than 20 people, and micro-sized businesses with four or fewer employees. Together, those firms account for nearly 80 percent of all businesses in Bernalillo County, she said.

Outreach and services should target lower income communities in places like Trumbull Village, the International District and the South Valley, where family income is generally about one-fifth or less than households in more affluent areas, Noonan added.

On the positive side, a much more robust entrepreneurial ecosystem has emerged in recent years in Albuquerque and across New Mexico, with a lot more innovation, collaboration, re-investment in neighborhoods and community goodwill that can be tapped, she said.

“The challenge is how to continue building on that,” Noonan said. “It’s incumbent on us to continue investing in the small- and micro-business sectors, and to celebrate diversity. It’s all about racial equity.”

By: Kevin Robinson-Avila (ABQ Journal)
Click here to view source article.

A consultant hired to study the financial feasibility of redeveloping the Albuquerque Rail Yards called a planned community college film center a “game changer” – one that could “define the economic purpose of the site” in lieu of waiting for another potentially hard-to-find anchor.
Portland-based Leland Consulting Group called Central New Mexico Community College’s proposed Film Production Center of Excellence “an exciting and potentially transformative use” at the Rail Yards. The firm’s recent draft report to the city said officials should “do everything in their power” to ensure it comes to fruition.
The city and CNM in January signed a one-year memorandum of understanding saying they would “jointly investigate the possibility of locating a Film Production Center of Excellence” at the Rail Yards. The college has not yet executed a lease and said late last month it is still examining the potential project. It has $300,000 in state funds and a $300,000 grant from the U.S. Conference of Mayors and Wells Fargo to plan the project. The college is also seeking $3.5 million for the project’s first phase as part of an $84 million bond issue going to voters this fall.
Leland’s latest report to the city – a draft “Summary of Market Analysis and Development Scenarios” dated May 7, 2019 – said the film center would be positive for a number of reasons, saying it would demonstrate redevelopment momentum, bring hundreds of students and professors – and their discretionary funds – to the site, and potentially spread the Rail Yards’ capital and operating costs among various partners. In addition, Leland said, CNM’s existing connections within the film industry could serve to attract other users.
“CNM can be one catalyst that pulls other innovative tenants and employers with it,” says the report, written by Leland’s Brian Vannerman.
The planned film center is especially valuable given what Leland’s report deems “economic warning signs” in Albuquerque.
While Vannerman wrote that Albuquerque seems to have recovered from the depths of the recession, and has seen some population and economic output growth, his report questioned the viability of adding much mixed employment space at the Rail Yards. It cited the largely stagnant lease rates at existing Downtown area office and industrial properties, and a real estate analysis that found prime Downtown locations are not commanding high enough rents to justify new construction.
Leland also noted a recent report by the Urban Land Institute “that indicates other western metro areas are more likely to attract outside development and investment dollars than Albuquerque.”
“All of this underscores and emphasizes the importance of achieving incremental successes, leveraging key anchor institutions and uses such as CNM and the Rail Yards market, and the risk of pursuing ‘one big tenant’ and a ‘silver bullet’ strategy at the expense of incremental momentum (though big tenants are possible),” Leland’s report said.

The 27-acre Rail Yards site is located about a half-mile south of the heart of Downtown. Mayor Tim Keller has made redevelopment of the property – which hosts the seasonal Rail Yards Market, the Wheels Museum and occasional film productions, but is otherwise mostly dormant – one of his top priorities, deeming it a potential economic development engine. The state Legislature earlier this year appropriated $7.5 million in capital outlay funds to aid in the effort, and the city is seeking another $5 million as part of a general obligation bond package going to voters this fall.
Though the city and CNM have not signed a lease or selected a specific site for the film center, CNM President Katharine Winograd said the college is eager to join the project.

“CNM is committed to building a new CNM Film Production Center of Excellence to support the workforce needs of the fast-growing film industry in Albuquerque and New Mexico,” Winograd said in a written statement. “Mayor Keller’s vision for the development of the historic Rail Yards is very exciting for our community and CNM is grateful to be a part of it.”
Leland’s 28-page report fulfills a portion of the firm’s responsibilities under its $54,944 contract with the city. But the firm has missed contractual deadlines for several other obligations. It has yet to provide a financial analysis for renovating existing buildings and erecting new ones on vacant parts of the site, nor has it produced an estimated cost for remediation of the site. Leland was also supposed to have analyzed options for Rail Yards governance and evaluated infrastructure upgrades needed to ready the site for construction.
The contract says that should have been done by late April. By late May, Leland should have filed a report with action plans for up to three proposed development pathways.
Karen Iverson, the city’s Metropolitan Redevelopment Agency manager, said the timelines have shifted for several reasons, including meeting schedules, and she expects a final report by the end of July.
“It’s a complicated project,” she said. “We want to make sure we take the time to have a thoughtful, meaningful product to move the conversation forward.”
By: Jessica Dyer (ABQ Journal)
Click here to view source article.

The neighborhood and community shopping center retail vacancy rate fell 10 basis points to 10.1 percent in the second quarter, according to New York-based commercial real estate data firm Reis. This is the first time in which vacancy has declined since the first quarter of 2016.
For context, in the second quarter of 2018, the rate had risen 20 basis points to 10.2 percent and remained flat at that rate through the first quarter of this year. The tightening of available space is in contrast to the larger talking points about U.S. retail, which often claim a “retail apocalypse” is upon us as e-commerce continues to cause a sea change in how Americans shop.
Reis information comes from its database of commercial real estate property information, spanning 77 primary metro areas.
Both the national average asking rent and effective rent, which nets out landlord concessions, increased 0.4 percent in the second quarter. At $21.39 per square foot (asking) and $18.73 per square foot (effective), the average rents have both increased 1.7 percent since the second quarter of 2018.
Mall outlook
The regional mall vacancy rate rose 30 basis points in the first quarter to 9.3 percent, the highest rate for mall vacancy since the third quarter of 2011, according to Reis. This came in the midst of a number of chains announcing store closures, including JC Penney, Payless ShoeSource, Charlotte Russe and Gymboree. The rate remained flat into the second quarter.
The performance of both malls and neighborhood centers will likely be affected by the continuing store closures throughout the second half of the year. Yet the stability of the trends this quarter shows how the retail sector has been able to withstand structural changes in the industry to some extent, argues Reis.
“As big-name anchor stores clear out, a number of stores continue to open,” says Victor Calanog, chief economist for Reis. “Grocery stores have been a leading new occupant of those vacant spaces over the past year or so, as have home/houseware stores, gyms/fitness, discount variety stores, discount clothing stores and even trampoline parks.”
Absorption stays strong
Store openings have led to strong occupancy growth this quarter, as net absorption outpaced new construction for neighborhood shopping centers. Net absorption for the second quarter was 2.4 million square feet, nearly double the previous quarter’s absorption of 1.29 million square feet. New completions measured just 1.49 million square feet.
When broken down by metro, the statistics show that few cities — 21 of 77 — experienced an increase in vacancy for the quarter. The figure was down from 28 metros in the first quarter. Metros with the highest vacancy rate increase include Columbia, S.C.; Charleston, S.C.; Birmingham, Ala.; San Antonio; and St. Louis. Metros with the biggest decline in vacancy include Chattanooga, Tenn.; Tacoma, Wash.; Colorado Springs, Colo.; Greensboro, N.C.; and Columbus, Ohio.
In sum, Reis argues that the retail sector has been able to ward off the worst of the “retail apocalypse” premonitions so far. On the supply side, empty big box stores have been converted into self-storage or sold to developers for redevelopment, former shopping centers have been demolished and there has been a general slowdown in building within the sector.
With minimal construction in the pipeline, vacancy rates were able to stabilize a bit this quarter, though the retail sector will likely see fluctuation ahead.
“A number of stores are still expected to close in the second half of the year and online shopping continues to offer stiff competition to brick and mortar stores,” says Calanog. “Older stores that are not keeping up with new business strategies or modernizing will likely continue to suffer and close in this tumultuous time. Still, the retail sector has been able to adapt to industry restructuring in a number of ways.”
By: Kristin Hiller (Rebusiness Online)
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