Albuquerque’s office market holds about 13.93 million square feet of inventory. Vacancy fell to 14.25% in the first quarter of 2026, according to a Colliers report released on May 7.
Overall, vacancy dropped from 15.66% in the fourth quarter of 2025 after several properties were removed from inventory for multifamily and mixed-use conversion.
Colliers Senior Vice President and Chairman John Ransom said there are many “hurdles” in the approval process for these types of property conversions, so the trend is not as widespread as many people think.
Some office spaces are suitable for residential or mixed-use conversion, while others are not depending on building features. This depends on requirements such as various interior and exterior building characteristics required for approval, he added.
In the U.S. office market report, the overall office vacancy rate is 18.6%, according to CBRE Research for the first quarter of 2026.
Companies are still figuring out how to use office space since massive vacancies resulted from the pandemic, Ransom said.
While there is stability in the office market, there are still some hurdles that have not been resolved. Ransom said tenant improvements — from labor to materials — carry steep price tags, whether renovating a space or upgrading a building’s quality. Buildings also need amenities to attract tenants.
There are also national and global business effects such as war and tariffs, he added.
“Those are still real barriers because they’re just very expensive,” Ransom said.
Regarding aerospace and defense creating a surge in office space demand, Ransom said that is true for subcontractors working with the Department of Defense and others. He added companies are hiring scientists and information technology professionals who are likely to occupy higher-end office spaces. As a result, vacant space in those types of buildings has become more desirable.
Some of the aerospace and defense companies that led activity for the first quarter of 2026:
- A 35,000-square-foot expansion by Albuquerque-based Raven Defense Corp. at 5411 Jefferson St. NE
- The New Mexico-based aerospace startup Mantis Space’s 20,000-square-foot facility at 10500 Copper Ave. NE.
Source: “https://www.bizjournals.com/albuquerque/news/2026/05/12/albuquerque-office-market-vacancy-falls.html”
