December, 2022 | CARNM

Demand for smaller shopping centers surged in the last quarter, with absorption jumping 20% to 8.1 million square feet in Q3.

According to research from JLL, absorption for smaller centers totaled 35.6 million over the last 12 months, with sporting goods brands, off-price retailers like TJ Maxx and Marshalls, and home improvement retailers responsible for several large move-ins.

Vacancy for such spaces currently stands at 5.6%, with 11.3 million square feet under construction as of the end of Q3, per CoStar data. This was “helped by 3.7 million square feet of demolished space in the last 12 months,” according to JLL. Around 1.2 million square feet of new space was delivered in the third quarter.

In addition, analysts say small F&B tenants like Crumbl Cookies and Jersey Mike’s, cosmetic and beauty retailers, and other local tenants drove move-ins for smaller spaces. The average size of signed leases for community and neighborhood centers fell 5.1% and 3.5%, respectively, according to the JLL report, while average strip center lease sizes increased 3.4% from the previous quarter.

In neighborhood centers, key big box tenants were Goodwill, Planet Fitness, and Spirit Halloween while smaller tenants included Rent-A-Center, Stretch Zone, and T-Mobile. Big box players in community centers included Total Wine & More, Floor & Décor, and Michaels with smaller tenants including Shoe Show, AT&T, and Mathnasium. Big boxes in strip centers include Trader Joe’s and The Learning Experience.

Source: “Smaller Retail Centers In Demand As Market Realigns”

A mixed-use project from a city agency and a local development company is one step closer to becoming a reality.

The project, called The Downtowner, would bring 207 rental units, 11 live-work units and a café to First Street and Silver Avenue in Downtown Albuquerque, according to the Metropolitan Redevelopment Agency, which is partnering with Albuquerque-based Rembe Urban Design + Development on the project.

A development and disposition agreement and a tax abatement application were recommended for approval by the Albuquerque Development Commission on Wednesday. The project is expected to break ground late 2023. MRA spokeswoman Sarah Allen said this project would fall under the city’s new housing initiative, Housing Forward ABQ, aimed at bringing online 5,000 new housing units by 2025.

“Albuquerque is facing a critical need for more housing units to accommodate the existing and future housing demand at all income levels,” Albuquerque Mayor Tim Keller said in a statement. “The Downtowner will bring an influx of development to our downtown core, increasing street-level activity and creating a safer environment.”

The multistory development includes a combined 131,700 square feet, according to a project summary submitted to the commission last September, and is expected to cost around $21.3 million. The project budget stands at $30.1 million. If approved, the project is expected to be completed by late 2025.

Rent for studio space and one-bedroom apartments will range between $750 and $925. And two-bedroom and live-work lofts are expected to range between $1,095 and $1,200, according to the project summary. The average rent in Albuquerque for a one-bedroom unit, according to rent.com, stood at $1,155 at the end of November.

According to the tax abatement application, the city currently owns the lot and pays $0 in annual property tax. But with the tax abatement, and when the project is complete, the “total value of the tax abatement over the term of 7 years is Projected to be $1,481,766,” according to the document.

The development and disposition agreement also spells out some incentives for the project from the MRA, including a $1.8 million gap financing grant and the land itself. The project is being completed by Alb. Downtowner LLC, a partnership between Rembe, Insight Construction and Mullen Heller Architecture, according to the documents.

The project will be nestled along the Albuquerque Rail Trail, a proposed seven-mile loop trail that would connect core parts of the city.

Jay Rembe, CEO of Rembe, said a project like this can bring more people into the area to help “support our local downtown businesses and restaurants.”

“I have always been a firm believer that all great cities have great downtowns,” Rembe said. “… These urban dense multistory buildings are extremely complicated and expensive and if it were not for the city incentives, this building could not be built.”

Source: “A mixed-use project in Downtown ABQ is one step closer to reality“

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