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Archives for July 2019

A New Type of Anchor Tenant Lands in Winrock

July 8, 2019 by CARNM

In a way, the recent news from the ongoing redevelopment of Winrock Town Center reflects a return to the mall’s groundbreaking roots.

In June, New Mexico Orthopaedics signed a lease to occupy 68,000 square feet of space near Regal Cinemas. For New Mexico Orthopaedics, it’s an opportunity to offer patients many of its services in a location with abundant parking and nearby amenities.

And for Winrock, the new tenant helps the shopping center’s evolution into a setting where visitors can play, work and live, according to Darin Sand, vice president for development at Goodman Realty Group, which is leading the redevelopment project.

“I think our center is unique in a lot of ways,” Sand said.

When the Winrock Shopping Center was completed in 1961, it was a game-changing development for Albuquerque. Winrock was the first indoor shopping mall in New Mexico, and it provided a shopping experience unlike any other in the city until the nearby Coronado Center opened later that decade.

Although Winrock fell into decline after newer, larger competitors were built, developers are more than a decade into an elaborate redevelopment project, converting the shopping mall into a development known as Winrock Town Center. The center retains room for more traditional restaurant and retail tenants, but Sand said health-oriented businesses will be a key component of the mall’s rebirth.

“We’ve envisioned a medical or health and wellness component to Winrock,” he said.

The approach is gaining momentum in shopping centers nationwide. Declines in traditional big-box retail and a push for more convenient health care options have caused more such operations to set up shop in malls and other retail centers. Sand said it helps broaden the mix of tenants as the shopping center continues to take shape.

“It certainly diversifies, from a developer’s perspective,” Sand said. “It gives people a reason to come to the site.”

Nancy Adelsheim, executive director of New Mexico Orthopaedics, said the relationship helps the orthopedic provider as well. The business has operated out of its current location on Cedar Street SE, next to Presbyterian Hospital, for about 15 years. However, with the current lease about to expire, Adelsheim said, she was looking for a space that would be closer to New Mexico Orthopaedics’ surgery center, on Presbyterian’s Kaseman campus in Northeast Albuquerque, while providing additional parking and other amenities for patients.

“There seems to be this growing trend in health care, where physicians … are looking to relocate outside traditional medical buildings,” she said.

The facility is scheduled to be completed by the end of December, Adelsheim said. Once it’s complete, the building will house about 200 full-time employees. Both Adelsheim and Sand are optimistic that New Mexico Orthopaedics’ presence will help attract other health providers and wellness-oriented companies.

Shipping-container developer sets his sights higher

Elsewhere in Albuquerque, the developer behind Albuquerque’s first shipping-container shopping area began work on another, more elaborate one in the Northeast Heights.

In June, builders began work on Tin Can Alley, a multiuse development that incorporates shipping containers in its design, after a groundbreaking event last fall. Developer Roy Solomon said Tin Can Alley will bring an array of local restaurants and other businesses to the southeast corner of Alameda and San Pedro NE, potentially bringing together a broad mix of families and professionals, much as Green Jeans Farmery, Solomon’s first shipping-container development, has done.

“My main goal was to make sure we didn’t lose the charm of Green Jeans,” Solomon said.

Green Jeans Farmery – named in part for proposed gardens surrounding the shopping center that never came to fruition – opened near Interstate 40 and San Mateo NE four years ago. At the time, Solomon said the development, which uses shipping containers for its storefronts and exterior structure, was unique in Albuquerque, and proved challenging to get off the ground. Ultimately, however, he said Green Jeans proved successful, and remains fully leased four years later.

While the concepts are similar, Solomon said, Tin Can Alley will differ from Green Jeans in a few key ways. First, the development won’t rely strictly on shipping containers, but rather will blend the containers with conventional architecture, which will allow the development to have higher ceilings and feel more spacious, Solomon said.

He said Tin Can Alley will feature garage doors enclosing a portion of the seating area, which will close during inclement weather and open when the sun comes out, giving the center space that can be used no matter what the weather holds.

Additionally, Solomon is seeking a wider variety of food vendors than the first shopping center has. Eleven tenants have signed on, with food offerings ranging from Vietnamese soup at Pho Kup to Jamaican food at Guava Tree, which operates a restaurant in Nob Hill. The restaurants will share a commercial dishwashing area, which allows Tin Can Alley to reduce the amount of disposable silverware it uses, while giving the small businesses a chance to split the cleaning costs.

“I find everything that’s shared like that is one step closer to the chances of a small business making it,” Solomon said. “Here, you can share in the downs and share in the ups.”

After some permitting challenges that delayed the start of construction, Solomon said, he now expects Tin Can Alley to open in January or February. He is still seeking a few vendors, including a coffee shop and a miniature nursery, for the development.

“I’m still open for something that’s unique and different that would add something to our community and the community around us,” he said.

By: Stephen Hamway (ABQ Journal)
Click here to view source article.

Filed Under: All News

Take the Due Diligence High Road for Cannabis-Related Leases

July 8, 2019 by CARNM

Katy Young, managing partner of Ad Astra and the current president of the National Cannabis Bar Association, recently shared insights into leasing retail space for cannabis use in this EXCLUSIVE.

A recent report by Cushman & Wakefield shows that low vacancy combined with continued high levels of demand in Sacramento have led to rapid growth in asking lease rates, closing the first quarter at $0.68 per square foot per month on a triple net basis. The report does call out that the lofty figure is likely inflated by landlords seeking out cannabis-related industries demanding higher rents, but is also due in part to sustained levels of low vacancy.
Indeed, with medicinal marijuana giving rise to legal sales, cannabis is a hot button these days. And, the real estate landscape is no exception. In this exclusive, Katy Young, managing partner of San Francisco-based law firm Ad Astra and the current president of the National Cannabis Bar Association, recently shared insights into the ins and outs of leasing retail space for cannabis use, how long before it’s widely accepted by the general public, and cautionary tales about cannabis use leasing.
GlobeSt.com: What advice would you give to a cannabis company looking to lease retail space?
Young: Be sure that your landlord understands that your business functions in the cannabis space, and depending on your state’s laws, the landlord may have to participate in the licensing process insofar as being disclosed on the application. You should be careful to negotiate exit ramps in the lease, just in case your business does not obtain a license to operate a cannabis business. You’ll want to be able to terminate the lease if you can’t operate. Be sure to negotiate about the law of fixtures as well, especially for indoor grows, because the equipment that you affix to the property to run your business could become the landlord’s property.
GlobeSt.com: What advice would you give to a landlord who has been sought out by a cannabis company?
Young: Do your due diligence on the tenant: Are they licensed? Compliant? What is the corporate structure? Who will be your guarantor? Include a clause in the lease that allows you audit rights to check to ensure that your tenant is licensed and compliant. If the tenant loses its license, you want to be able to terminate the lease immediately to avoid civil asset forfeiture. Include clauses that allow exit ramps if the tenant does not get a license to operate or loses its license.
GlobeSt.com: Do you think we’ll see a day where CBD and cannabis products are widely accepted by both shopping center landlords and the general public?
Young: Oh yes. CBD is very popular among seniors and is already widely available despite still largely remaining illegal federally and in many states. CBD is the non-psychoactive form of the cannabinoids in cannabis, so it won’t get you high but it does appear to have the therapeutic properties that many medical patients seek. The stigma is worse than anything. As our society grows used to cannabis in the mainstream, shopping centers and the public generally will embrace cannabis use the way we tolerate cigarettes and alcohol.
GlobeSt.com: Is there a case study where a cannabis or CBD retailer was either turned away or had a license revoked as an example of the confusion and resistance remaining in this market?
Young: There are distance requirements that prevent cannabis businesses from being too close to a school, daycare facility, etc. In Oakland, one of my client’s had one of the coveted equity permits and was operating in a permitted space, but then a school moved in next door to them, and they lost their license to operate.
By: Lisa Brown (GlobeSt)
Click here to view source article.

Filed Under: All News

Multifamily Absorption Reaches 5-Year High

July 8, 2019 by CARNM

US apartment demand spiked during the second quarter of 2019 with product absorption climbing to a five-year high, according to RealPage. It reports that net move-ins totaled 155,515 units in the April-through-June time frame, topping Q2 2018 product absorption by 11%.
There are a number of reasons for the increase, says RealPage Chief Economist Greg Willett. Solid economic growth is encouraging new household formation, while the number of existing renters purchasing homes remains limited compared to historical levels, he says. The time of year also helps, he adds.
“Apartment leasing activity accelerates during the warmer weather months, and demand is proving especially strong in this year’s primary leasing season.”
With demand proving so strong in the second quarter, occupancy tightened despite the delivery of quite a bit of new product. Occupancy climbed to 95.8% in the second quarter, up from 95.4% a year earlier.
Rents for new leases increased 1.8% during the second quarter, which normally is when pricing moves most rapidly during the course of the year. Rents are up 3% from year-ago levels, reaching an average of $1,390 per month.
Building in the US apartment sector remains at three-decade highs, RealPage also reports—which could lead to near-term risk. Market-rate apartment properties under construction contain more than 418,000 units that will be finished during roughly the next 18 months.
Willett reports that most economists are anticipating a slowdown in economic growth, which will cool support for housing demand. “It would be tough to maintain price growth with so many new properties moving through initial lease-up at a time when demand has weakened.”
By: Erika Morphy (GlobeSt)
Click here to view source article.

Filed Under: All News

What’s Next for New Mexico’s Energy Future as Utility Transitions Away from Coal

July 8, 2019 by CARNM

Coal has provided affordable, reliable energy to New Mexico for decades. The downside of coal is greater emissions and higher fuel costs. As part of the state’s largest utility effort to lead the nation in reducing emissions, PNM is transitioning away from coal.

This past Earth Day, PNM announced it would become the nation’s first investor-owned utility to set a goal to be 100 percent emissions-free by 2040. PNM has since filed for the closure and replacement of its coal-fired San Juan Generating Station.

Through an innovative approach, the PNM proposal replaces coal-fired generation with renewable resources and cutting-edge technologies. If the New Mexico Public Regulation Commission approves the plan, it can lower residential customer rates and meet the reliability requirements placed on utilities by the Federal Energy Regulatory Commission and the North American Electric Reliability Corporation.

“Each step we take toward 100% emissions-free must balance the cost, the environment, and reliability,” said Pat Vincent-Collawn, PNM Resources chairman, president and CEO. “The San Juan replacement plan we put forth will not only save customers money, but will have one of the largest solar facilities in the U.S. and one of the highest percentages of battery storage anywhere in the country.”

While PNM is required to file only one plan, the utility has included multiple scenarios in the filing for the New Mexico Public Regulation Commission and customers to understand how resource decisions can impact reliability and costs.

The plan includes a combination of new solar generation, energy battery storage, and new flexible natural gas. The plan provides high reliability, low costs, and addresses environmental concerns by depreciating new natural gas resources by or before 2040 so New Mexicans can transition to an emissions-free future.

Additionally, a step away from coal is not a step out of the communities PNM has been a part of for so long. The utility will continue to identify innovative ways to support economic development in those areas impacted most by this transition.

“PNM is committed to an open and transparent process that works with the New Mexico Public Regulation Commission’s public process to provide all information needed to make an informed decision on New Mexico’s energy future,” said Ron Darnell, PNM senior vice president of public policy.

By: Shannon Jackson (ABQ Business Journal)
Click here to view source article

Filed Under: All News

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