Archives for August 2020

Commercial Real Estate Trends & Outlook – July 2020

August 17, 2020 by CARNM

Page 4 – Commercial Sales and Prices
Page 6 – Land Market
Page 7 – Cap Rates
Page 8 – Leasing
Page 9 – Vacancy Rates
Page 10 – Construction
Page 11 – Multifamily Outlook
Page 12 – Office Outlook
Page 13 – Industrial Outlook
Page 14 – Retail Outlook
Page 15 – Realtors® Market Expectation
Page 16 – About the Survey
Download the report here.
Source: “Commercial Real Estate Trends & Outlook“

Building on Vision for ABQ West Side

August 17, 2020 by CARNM

The last two decades have seen millions of square feet of development go up on the West Side of the Albuquerque metro area.

In the area known as Upper Petroglyphs, near Interstate 40 and Atrisco Vista, none of it has happened by chance.

Recent developments in the area – including ongoing construction of a new Amazon fulfillment center, millions of dollars in new infrastructure and plans for housing developments – are all the result of a decades-long plan dating back to the mid-’90s.

While the Amazon fulfillment center is the latest news, the area has been home to industrial warehouses since the mid-2000s when Tempur-Pedic opened its 750,000-square-foot facility. Shamrock Foods Co. followed suit several years later with the purchase of 45 acres for its warehouse and distribution center. And more recently, a FedEx Ground distribution center expanded to a 183,000-square-foot facility farther east on Daytona Road in 2015.

Ultimately, county leaders envision an area rife with industrial parks and neighborhoods with open spaces and commercial plots sprinkled throughout – and, perhaps most significantly, many more West Side jobs for Bernalillo County residents.

Bernalillo County Commissioner Debbie O’Malley, who represents the northwestern-most district in the county, said Amazon’s new center is a major step in that direction.

“It’s hugely significant,” she said. “What it does is it provides jobs for the West Side. I mean, that’s been the biggest pushback in terms of frustration of development over there, is that we have a lot of rooftops, but not enough jobs.”

Background

The Upper Petroglyphs Sector plan, developed jointly in 1995 by Bernalillo County and Albuquerque officials, laid out zoning plans for the continued development of the neighborhood, which covers the area north of Interstate 40 from roughly Atrisco Vista Boulevard to just east of Arroyo Vista Boulevard.

The plan, which loosely guided development through zoning, covers areas in both Albuquerque and Bernalillo County. But the introduction of the Integrated Development Ordinance in 2017 removed the specific plan for the city with the creation of a more uniform plan for all of Albuquerque. The Albuquerque segment of the 1995 plan includes several housing developments and the Nusenda Community Stadium.

For Bernalillo County, the plan continues to be used and updated regularly in an area that is still mostly undeveloped.

Slow and steady

Though development of the area that falls in Albuquerque’s city bounds has mostly been completed, the Upper Petroglyph section of Bernalillo County still has a way to go before the pre-millennium vision is realized, said Enrico Gradi, deputy county manager for Bernalillo County.

He said most of Bernalillo County’s West Side development in the near future will concentrate on large campus industrial areas – like the Amazon fulfillment center already under construction.

Gradi said the steady, decades-long approach is finally paying off, since major companies look for regularity in planning, because it shows that cities are thinking about their long-term layouts.

Commissioner O’Malley said Amazon chose the site specifically because it was near I-40, the FedEx distribution center and near the Double Eagle airport.

“There was no huge recruitment effort to get (Amazon) here,” she said. “… They felt it was the perfect location for them to have their building there.”

Jobs to follow?

Right now, much of the construction in the area has been industrial, but Gradi said permits are being filed for construction of single family housing, and zoning allows for multifamily housing in the area that will be more affordable and can appeal to workers in the industrial areas.

Gradi says development of the area is halfway done with most of the development falling inside of Albuquerque, and he expects the area to be fully developed within 20 years.

O’Malley – who recently sponsored an approved $6.5 million infrastructure request for the Atrisco Vista corridor – said she’s anticipating major growth of the area.

She said she anticipates other large companies will follow in Amazon’s steps by also moving into that area.

That’s important because of the way the West Side has historically developed. Gradi said for years the West Side was dense with housing, but lacked employers and other amenities like retail and entertainment options.

“The overall discussion going way back is that we want to try when we can, where we can to have a balance of jobs and housing, because, you know, there’s only so many river crossings,” Gradi said.

The Upper Petroglyph plan seeks to help remedy those past mistakes by creating an appropriate jobs to housing ratio – though Gradi cautioned the zoning plan itself is not a guarantee for development.

“Where the county stands is that we feel very good that we have this plan and others that provide a framework and a direction and predictability for future development in these areas,” Gradi said. “And we feel good that we have a balance of uses.”

Source: “Building on Vision for ABQ West Side“

The Current Status of Eviction Bans by State

August 13, 2020 by CARNM

Many elected leaders enacted emergency bans on evictions as part of COVID-19 relief measures. Those have now come to an end in some states.

A big part of COVID-19 relief policy in the early days of the crisis was a ban on evictions. At the federal level that included a 120-day ban on evictions as part of the CARES Act, which has now expired.
Separately, the FHFA has ordered Fannie Mae and Freddie Mac to keep in place moratoriums on foreclosures and evictions on enterprise-backed, single-family mortgages only. That ban is scheduled to expire on August 31. In addition, the FHFA has mandated that multifamily property owners with government-backed loans in forbearance inform renters about the eviction protections the policy extends to them.

Aside from that, many states and cities put in place additional bans. Eventually, some of these prompted legal challenges that are still winding their way through the court system.
Having evictions on hold was an adjustment for multifamily property operators, although by and large, the fact that many renters have been able to keep current on rents made it less of a pressing concern.
Now, with both extended unemployment insurance benefits and eviction moratoriums expiring, the number of evictions could quickly explode.
Legal website NOLO.com has been maintaining a regularly updated list of the current status of local eviction bans. Based on the information from that site, which was last updated Aug. 7, here is a list of the current status of eviction bans in states across the country. For further info on the situation by state, go here.
Click here to view map.
Source: “The Current Status of Eviction Bans by State”

CBRE Economist Sees Favorable Signs For Office Sector, Wider Economy

August 13, 2020 by CARNM

A turn towards remote work may be partially offset by decreased densification in offices, according to CBRE global chief economist Richard Barkham.

The global chief economist for commercial real estate giant CBRE says he’s optimistic about the long-run outlook for the office sector in spite of businesses’ rapid adoption of technology that facilitates remote meetings.
In a recent podcast conversation, Richard Barkham told host Spencer Levy that while the near-term prospects for the asset class are dim, he’s confident that demand will bounce back.
“I remain convinced that the office sector is viable in the long term,” he said. “It’s where people meet. It’s where creativity happens. It’s where clients get helped. That’s where we train and bring in younger people into the workforce. And all those things are going to need to reestablish themselves.”
Barkham acknowledged that the flight away from full-time office work for many employees is likely to be permanent. While 63% of office employees traveled to their workplace all the time before the coronavirus crisis, and pre-crisis projections forecast a dip to 52% by 2030, so estimates now pin that number at between 20 and 25%.
“We’ve had the wind behind us over the last 20 or 30 years, which is continual growth in the office sector, continual growth in the amount of space that’s devoted to office,” he said.
But he also said there’s reason to hope that a readjustment in how space gets used could offset this trend, as concerns about exposure to future pandemics result in the allocation of greater space to each employee.
Barkham continued that the outlook for data centers and logistics facilities is particularly robust at the moment, with the conoravirus forcing a pivot towards not only remote work but also digital commerce.
“Retail sales are now back to their pre COVID levels,” he said. “And not all of that is going through stores. that’s going through our industrial and logistics sectors. That’s very hot at the moment and looks likely to continue.”
Other non-traditional real estate asset classes aren’t likely to flourish in the same way.
Not every alternative benefits from COVID-19. Student housing, seniors’ housing…that kind of communal living has been a little called into question,” Barkham said. “But I think in that case, we need to remember that there will be a world after COVID-19 and the long term demographics points heavily towards more seniors’ housing and also more student housing.”
Looking at the big picture, Barkham believes that—in spite of the U.S.’s struggles in responding to the coronavirus crisis—the economy will bounce back in 2021.
“I can understand the lack of confidence that the flare up in the virus, particularly in the United States, has not been well handled. It dealt a big blow to confidence and that might delay the recovery,” he said. “We’re not, as I have said, I think, too far away from a generally available vaccine. It may not be a cure all, but therapeutics are coming. And so I think the outlook for 2021 is much better than people expect.”
Source: “CBRE Economist Sees Favorable Signs For Office Sector, Wider Economy”