Office and Industrial updates
Bob – Good morning Walt, What do you have for us today?
Walt – Bob, I know you’re not a big Paul McCartney fan, but I really enjoyed the Grammy’s last night and his performance at the end was awesome. But I digress, back to commercial real estate.
Today I wanted to give a year-end summary for office and industrial markets for the Albuquerque metro area,
The Albuquerque office vacancy was 18.7% which is slightly up from a year a year ago. Some notable construction completions were the U.S. Forest Service building and DEA both completed projects in 2011. REDW also occupied a 46,000 ft.² built to suit in December 2011.
Median asking rates for the market were at $15.50 per square foot down $.13 from a year ago.
Blend and extend strategies where the landlord gives the tenant some concessions now and extends the lease term for longer a longer period of time are still working in this market. Most landlords are doing all that they can to retain tenants.
Class B space is $17.73 per square foot per year
Class C space is $14.00 per square foot per yea
Bob – What about the industrial markets?
Walt – At the end of 2011 the vacancy rate in the industrial market was at 9.4%.
Some notables that happened in 2011: 609,000 ft.² of the former GE plant in the South Valley was removed from the market statistics when the building was demolished. CNM also moved about 82,000 ft.² out of the market vacancy numbers by occupying a building at Jefferson and Alameda; those two properties removed 1.7% of the industrial market from the vacancy statistics. That one way to improve the numbers is to remove supply from the market
Another notable was that US foods built a 134,000 ft.² building in the South Valley. Only 23,000 ft.² of speculative space was built in the Albuquerque market in 2011.
Median asking rates: $6.69/sf/yr on a triple net (NNN) basis down 16 cents from a year ago and R&D/Flex space vacancy was at 9.5%.
Bob – If you were handing out any awards for last year, do you have any winners?
Walt - Yes I do, it would have to go to Titan Development/Reid and Associates for completing the Forest Service Building in the Journal Center, also for selling both of those buildings for approximately 50 million dollars and also the completion of the REDW building in the Journal Center. If they were at the Grammys they would be like Adele, they would have won all the awards and been the star of the show, so congratulations to Titan Development and Reid and Associates for a great year.
Bob – Walt, how can people contact you for information on commercial real estate?
Walt – Thanks Bob, they can call Walt Arnold, 256-1255 or check us out on the web at waltarnold.com also follow me on Twitter of become a fan of Sperry Van Ness on Facebook. For all you guys and gals out there don’t forget tomorrow is Valentines Day. Make tomorrow a great day. See you next week!