We’ve reported on a well-performing industrial real estate sector in the Albuquerque area, a market that saw more activity and absorption last year. A new report from CBRE Albuquerque chronicles the activity and provides some strong year-end numbers.
Some big stats for industrial: Net absorption in 2015 was at its highest level since 2007, and Albuquerque’s overall vacancy rate of 6.5 percent was the lowest since 2007.
The former 192,000-square-foot Schott Solar building in Mesa Del Sol was occupied by a data center and United Poly Systems in 2015.The report, compiled by CBRE’s senior research analyst Atsuko Poelman, shows there’s not just one type of building towing the industrial real estate economy into record numbers.
All types of buildings, from warehouses to manufacturing buildings, saw positive leasing activity, which led to even lower vacancy rates.
Albuquerque saw some big transactions in 2015. Flagship Food Groups, United Poly Systems, Nova Corp.’s data center and New Mexico Food Distributors absorbed about 270,000 square feet in the market last year.
The report said about 200,000 square feet of industrial space was completed in 2015, though most of that can be attributed to FedEx’s new facility in the Southwest Mesa. CBRE’s research shows an additional 75,000 square feet of industrial space is under construction now.
Industrial users are hungry for more modern buildings, the type with high ceilings and new systems. The lack of that kind of supply has led to rent increases among quality facilities, which is usually a sign of construction to come.
CBRE says Albuquerque isn’t quite there yet.
“In the coming year, the market will continue to see some build-to-suit projects to accommodate demand. However, with replacement costs continuing to be greater than asking lease rates, new speculative construction is not likely,” the report said.
By: Stephanie Guzman (Albuquerque Business First)
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