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Downtown’s beleaguered office real estate market, carrying a close to 30 percent vacancy rate, has given the Albuquerque metro area one of those undesirable number rankings, according to a presentation Monday at a luncheon meeting of NAIOP, the commercial real estate development association.
“Unfortunately, our central business district has a higher vacancy rate than any other central business district in the country right now,” said Tim With of Colliers International, moderator of a panel discussion of the commercial real estate prospects for the office and industrial property types. The office market in general, which has a 20 percent vacancy rate, is facing a couple of major obstacles to recovery – the continuing trend of businesses packing more employees into less space and a substantial inventory of aging office buildings, many in Downtown, said panelist Tom Jenkins of Real Estate Advisors. “I believe the lack of quality space in the market will deter job growth,” he said.
The office and industrial real estate markets in the metro generally are lagging the national recovery, according to the “market update” at the NAIOP luncheon by the New Mexico chapter of the Society of Industrial and Office Realtors. The local industrial real estate market, which has a 9 percent vacancy rate, is seeing positive activity generated by distributors of consumer goods, a trend illustrated by the recent expansions of Pepsi-Cola Bottling Co. and Admiral Beverage, said panelist Jim Smith of CBRE.
Another generator of activity in the industrial market is the oil and gas industry, particularly from pipeline construction, he said. Net absorption – meaning more space is filling up than going empty – is expected to reach a level this year that surpasses the net absorption of the prior six years combined. A common theme in both the office and industrial market is the so-called “flight to quality,” a term used to describe the migration of companies away from renting older, cheaper buildings. High-quality Class A buildings of both property types are generally seeing rising lease rates because of demand.
By: Richard Metcalf (Albuquerque Journal)
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New Mexico’s seasonally adjusted unemployment rate was 6.6 percent in October 2013, down from 6.7 percent in September and also down from 6.8 percent a year ago.
The rate of over-the-year job growth, comparing October 2013 with October 2012, was 0.2 percent, representing a gain of 1,900 jobs. Eight industries added employment over the year, and five industries lost jobs.
The largest employment gains were reported in the financial activities industry, adding 3,000 jobs since this time last year. Gains in the leisure and hospitality industry have slowed to 2,200 jobs now that the peak tourism season is over. Both the construction and retail trade industries reported a gain of 600 jobs each. The mining industry added 500 jobs, continuing the moderating trend from a previously higher growth rate that was in the thousands.
The educational and health services industry lost 1,100 jobs. Manufacturing employment declined by 900 jobs. Government employment registered a net loss of 3,100 jobs since last year, with similar-sized losses reported at the federal and local levels.
Detailed analysis will be provided in the Labor Market Review scheduled for release on December 2.
New Mexico Department of Workforce Solutions – New Mexico Economic Data 11.22.13