Archives for November 2019

Imagine waiting 45 minutes to an hour to eat at a chain sit-down restaurant in the middle of the week. That’s the reality of living in the middle of “Permania,” as some call the oil and gas activity in the Permian Basin.

The growth of the oil and gas industry in southeastern New Mexico has spilled over into several needs for its growing economies, namely the housing and retail markets.

Business First spoke with officials in the heart of the oil boom about what the spike in oil and gas production has led to and what’s needed next in their communities.

The city of Carlsbad reported gross receipts taxes of $10 million to $20 million last decade. Then those tax collections climbed to $30 million, $40 million, and exploded to more than $66 million in the 2018-2019 fiscal year.

“Retail indicates how much money people have to spend in our community,” said John Waters, executive director for Carlsbad Department of Economic Development. “The goods and services across the board that have definitely benefited from our phenomenal economy here.”

The boom has contributed to flights from Hobbs to Houston and Denver and multimillion-dollar projects, such as a more than $60 million aquatic center, proposed construction of a $75 million hospital and a $50 million vocational high school.

“At the heart of the Permian Basin, Hobbs, New Mexico has a long history of being ready to take advantage of this most recent boom,” Josh Grassham, vice president of commercial banking at Lea County State Bank in Hobbs, told Business First. “[The high school] will address the many workforce development needs created by the oil boom.”

While the amount of money spent and overall investment in southeast New Mexico communities remains strong, the need for more services remains. Just weeks after opening a new 60,000-square-foot Albertsons grocery store, officials are ready for more.

“We need another one,” Jay Jenkins, president and CEO of Carlsbad National Bank, said.

While the current residents of southeast New Mexico might have to account for extra wait time to eat at a restaurant or to get a parking spot at its grocery stores, leaders say addressing the availability of housing is another essential step for their economies to capitalize on the boom.

“We really, really need apartment builders down here in a really bad way,” Waters said. “Workforce housing is tough because even though oil people are paid pretty well, those people aren’t finding places to live, many times. And then you look at all the necessary services to support all the industries, which are our police, our teachers, our firefighters — the critical people you need in your community — and those people are having a difficult time finding a place to live.”

Grassham said Hobbs needs to build an additional 2,000 homes and 2,330 apartment units by 2020 to meet the current demand for housing.

“This all [indicates] what the economy is doing,” Jenkins said. “It’s fueling activity for everyone to raise the bar.”

By: Ron Davis (Albuquerque Business First)
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With larger floor plates and higher parking ratios, large shopping centers could become homes to call centers and other back office support functions.

Many malls across the country are struggling, but there are possible fixes in some situations. A solution used to revitalize the West Oaks Mall in Orlando could be a model for other shopping centers.
In Orlando, the Sunpass Customer Service Center, which is operated by Xerox, leased 75,000 square feet space in a former Sears. A Bed, Bath and Beyond call center occupies another 40,000 square feet, which used to be leased by a Belk.
David Chapin, EVP at JLL, thinks more office tenants will look towards malls as a high-density office space option for a low cost. To him, the mall is a perfect home for call centers and back office functions, especially with recent trends in open office floor plans and cafe style conference rooms.
As cities are growing and the labor market is changing, so is the office demand.
“We have these vacant retail buildings,” Chapin says. “As these larger users, needing anywhere from 25,000 to 30,000 hundred thousand square feet, get bigger, they want larger floor planes and higher parking ratios.”
The flow of the floor plates in malls can be especially appealing to large office users, such as call centers. “It’s very rare to find a floor plate of 40,000 to 100,000 square feet,” Chapin says. “Because these [mall] retail spaces are large, they’re require very large floor plates. That’s an added benefit. You wouldn’t build office buildings with floor plates like that.”
Chapin says high-density call centers or back office users are also attracted to the high parking ratio, 18-foot high, clear ceilings and amenities in malls. “Over time we feel like the amenities will develop inside the [West Oaks] mall,” he says. “We have an active food court. We also have a 14-screen AMC theater, and there’s also quite a bit of retail. As the head count grows in the traffic, even from the employees of the mall, then that should generate more demand.”
When call centers come into malls, Chapin says they require a complete renovation of the interior. “The space is gutted and built back out from scratch,” he says. “The good news is a lot of these new high-density office configurations—where you have the collaborative space and the wide-open floor plans—are being done inside the office buildings as well. So really the build out is not that much different.”
In addition to movie theaters, stores, office space and retail, Chapin says there is potential for more uses. “If the deal comes together properly, there is always the possibility that a mall owner could add apartments to support the employees [in the office and retail],” he says.
By: Les Shaver (GlobeSt)
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At the November 2019 LIN Meeting held on November 20, 2019, 12 excellent properties were presented.
Thank you for presenting properties and attending the meeting!
Thank you to Riley McKee, Jim Wible and Keith Meyer who hosted:
Albuquerque Trade Center | 3540 Pan American Fwy | Print Flyer
View November 2019 LIN properties here.
View November 2019 LIN Thank Yous here.