Big-box retail exits, demand for medical office space and continued low industrial vacancy rates dominated 2025 headlines and commercial real estate trends in Albuquerque.
Last year also saw the continuation of the medtail trend, the repositioning of office assets into other uses and the flight to quality across multiple asset classes.
Albuquerque Business First spoke with industry experts to discuss some of the state’s largest upcoming projects in each asset class and what they think the biggest trends will be in the 2026 commercial real estate market.
Retail
The Albuquerque retail market saw a flurry of big-box retail spaces come available in early 2025, including former Big Lots, Joann Fabrics and a Party City.
And since then, there’s been strong absorption of those big-box spaces, according to NAI SunVista retail broker Ethan Melvin.
Burlington occupied a former Northeast Heights Big Lots location, Black Friday by ABQ Crazy Liquidation occupied a former Joann Fabrics, and an Arc Thrift Stores is set to occupy another vacated Big Lots space, among other examples.
Heading into 2026, Melvin said it’s essential to review macroeconomic indicators and how they will affect businesses occupying big-box spaces.
If it’s a public company, stock performance and quarterly earnings will be strong indicators of the company’s health and its future occupancy of the space.
Several big-box retail spaces still remain available, however, which skews vacancy data. Overall, retail vacancy is still low, although it is trending upward, Melvin said.
The city’s vacancy rate is currently at 7%, according to the most recent data from Colliers New Mexico-El Paso. Previous data showed it was 5.6% at the same time in 2024.
Most vacancies are in older trade areas, such as the Southeast Heights, the University area or Downtown, which have a 16%, 14% and 18% vacancy rate, respectively.
Quality inventory is very tight, though, and it’s still largely a landlord-friendly market, Melvin said. This is demonstrated by the North Interstate 25 submarket, the Far Northeast Heights and Uptown posting vacancy rates of 4%, 3% and 0.7%.
A concentration of vacancies in the Southeast Heights and a tight class A market follow what Melvin said is a flight-to-quality trend in the retail asset class.
This trend is evidenced by Marshalls relocating from the West Cottonwood Shopping Center to Cottonwood Commons, Ethan Allen’s move to Winrock and the leasing velocity at Lobo Crossing, a new class-A retail development.
Melvin anticipates this trend will continue in 2026.
Retail tenants should note that convenience is key for today’s consumer, so fundamentals like business access and nearby co-tenancy should be of utmost importance when considering a new space, Melvin said.
Some of the marquee new retail developments in the metro include the Lobo Crossing Shopping Center, Sunset View and the Glyphs at Volcano Mesa.
Here’s a look at each project:
- Lobo Crossing Shopping Center: The highly anticipated project will be a newly constructed 38-acre, 363,000-square-foot open-air retail center in the heart of UNM’s South Campus TIDD. Most recently, it was reported that Target was eyeing an anchor-tenant space in the development.
- Sunset View: This Los Lunas development will feature four outparcels ranging in size from 1.04 acres to 2.15 acres, nine retail spaces in a retail strip ranging in size from over 4,000 square feet to 23,256 square feet and 473 parking spaces. Most recently, the Los Lunas Village Council approved a development agreement related to the center.
- Glyphs at Volcano Mesa: This project would bring 65,000 square feet of retail, medical, restaurant, grocery and early childhood learning tenants to Albuquerque’s west side. Most recently, the city council rejected an appeal of the project.
Office
While many markets saw and continue to see huge vacancies in the office asset class in the wake of the pandemic and the hybrid work model, Albuquerque did not experience such spikes.
And now, the city’s office vacancy rates are actually near what they were before the pandemic, Resolut RE office broker Jeremy Salazar said.
As such, Salazar anticipates savvy office investors will be optimistic and active in 2026, as skepticism is keeping office values down despite vacancy rates being similar to pre-pandemic levels.
“There’s been this idea that nobody is working in the office,” Salazar said. “Banks that lend to investors are still very skeptical about office properties, … but the reality is, especially in Albuquerque, we actually have better vacancy rates than pre-Covid.”
Salazar noted that the downtown submarket was an exception.
For Albuquerque office owners still experiencing high or elevated vacancy rates, Salazar suggested repositioning those offices to medical uses, which are in high demand and low supply.
The city’s low-supply, high-demand medical office situation is exhibited by UNM Hospital and Lovelace Medical Group building new locations in the South Valley and in Bernalillo, respectively.
It’s also somewhat shown by the medtail trend — when medical businesses move into traditional retail spaces — which saw Jorgensen Orthodontics relocate one of its offices to The Shops at Paseo Crossing.
“If you’ve got an office building that’s got a lot of vacant space, repositioning that to be attractive to medical tenants could be a good play,” Salazar said. “They’re just a little more stable, and there’s more demand out there for them.”
In 2026, small to medium office owner-users should plan for six to nine months of renovations and negotiations before moving in after finding a space, assuming things go to plan, Salazar said.
Large users should be looking at a year, he added. It took First American Title a year and a half to find its new space in the north Interstate 25 corridor.
Almost all of the new big-headline office projects are for medical office buildings, and Salazar expects new office construction to continue to be minimal in 2026 due to high construction costs and lack of population growth.
Here’s a look at some of the largest recent office projects:
- Holy Cross medical office building: This project would bring a new, 19,936-square-foot medical office building to Taos to address the city’s need for additional medical personnel. Most recently, the Taos County Board of County Commissioners granted authority to its county manager to sign the final negotiated contract with Bradbury Stamm Construction.
- Los Alamos lab and office space: A Chicago-based LLC is looking at a 6.3-acre site to build a 50,000-square-foot flex lab and office building to the east side of Los Alamos. Most recently, the Los Alamos County Council unanimously approved a time extension for the purchase, sale and development agreement for the property.
- Wells Fargo tower: This highly anticipated project would convert the former downtown Albuquerque Wells Fargo office tower into 100 affordable housing units, along with residential amenities and existing bank services. Most recently, the developer closed on the building acquisition and provided updates on its construction timeline and city agreements.
- Serenade at Park Central: This project would convert the 10-story office tower at 300 San Mateo Blvd. into a 110-unit apartment complex. Most recently, the developer just broke ground on the project.
Industrial
In Albuquerque’s industrial market, the big trends are expected to generally remain the same.
CBRE industrial broker Jim Smith predicts low availability with elevated lease rates, very little new construction and elevated construction costs, all of which are similar to the state of the industrial market this time last year.
The industrial market’s vacancy rate hovered between 4% and 5% between the first and third quarters of 2025, Colliers New Mexico-El Paso data shows.
Similarly, it hovered between 3% and 4% in 2024.
In such a tight market, Smith said tenants need to make plans two years out for their spaces, especially if new construction is a part of the equation.
It took APIC Solutions a year to find its 47,500-square-foot industrial space in 2025, previous Albuquerque Business First reporting shows.
Smith added that seeking market advice is important.
Here’s a look at some of the big headline industrial projects from 2025:
- 2810 Karsten: Geltmore LLC acquired the 52,856-square-foot industrial facility at 2810 Karsten Ct. SE in late 2024 and began renovating it for tenants in 2025. Most recently, CBRE’s Brecken Mallette, Cindy Campos and Smith listed the property for lease.
- 4000 Ellison: Mechenbier Construction is delivering a 76,574-square-foot flex office and warehouse space to 4000 Ellison St. NE. DH Pace Overhead Door will be moving into 75% of the building by Feb. 28, with the residual 25,000 square feet still available for lease, Mechenbier Construction’s Jeremy Mechenbier said in a Jan. 7 email statement.
- 98th Street: The 29-acre property near the Ken Sanchez Transit Facility and east of 98th Street and just south of Interstate 40 was planned for a 150,000-square-foot distribution facility. Most recently, the Environmental Planning Commission approved a proposed master development plan for the facility.
