Retail broker Ben Perich was named senior vice president and principal at Colliers International in 2022. His role involves selling and leasing commercial retail space in the New Mexico and El Paso markets. Perich serves as one of 10 board of directors for the company.
Albuquerque Business First recently chatted with him about what retail trends to expect in the area in 2024.
This interview was edited for brevity and clarity.
Albuquerque Business First: What is the biggest trend going into 2024 for the retail market?
Ben Perich: I think the trend is going to continue to be more drive-thru fast-food sites for new construction. There are a number of new concepts that are continuing to look at New Mexico that are driving some of that activity. Specific examples would be the expansion of Slim Chickens, Scooters and Dutch Bros. Retail has become challenging to finance and build new construction for non-drive-thru and non-fast-food establishments. It will continue to be hard to build new product in your traditional retail shopping centers and the apparel industry. That is a combination of interest rates, construction costs and then rents haven’t risen enough to compensate for those increased costs.
Are we still feeling the effects from the pandemic? In the retail world, the only real ripple effects that are remaining from the pandemic are labor issues, particularly low-income seasonal work. It’s become more expensive to find employment. There continues to be regulatory and statutory discussions about paid family leave and some of these sorts of costs that are increasing for employment. I think that’s really the only long-term effect.
Do you think the retail market in New Mexico is in a better state compared to other markets? Individual store sales tend to be very healthy in Albuquerque. It’s a performing market. We’re right-sized. We tend not to have too many concepts that don’t fit the market, that struggle. For example, [The] Cheesecake Factory, P.F. Chang’s and Pappadeaux’s are huge performers. Albuquerque tends to perform well from a restaurant volume perspective.
Do you have any advice for brokers organizing deals in 2024? Planning ahead and starting early is an important part of the equation. We’re still seeing major lead times on permitting issues, particularly new construction.