Tag Archives: vacancy rate

May 2012 Newsletter

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Newsletter HeaderNew Mexico Office Market

WESTERN SNAPSHOT, APRIL 2012, as published in the Western Real Estate Business, April 2012

The office market continues to experience uncertainty as job growth remains weak in the Albuquerque metropolitan area. The government sectors are still working on budgeting and cost-cutting measures that include the reduction of office space costs. This had a trickledown effect on the private-sector ownership of office space as the government reduced its requirements for space.

Companies continue to rack up sublease space, which is forecast to be more than 250,000 square feet in 2012. When you combine the amount of subleased space with shadow space it becomes evident that a return to normal supply and demand for office lease space is not in the foreseeable future.

The current office vacancy rate is 18.6 percent for the overall market, creating options for tenants to relocate and achieve lower rates. They also have the power to renegotiate with current landlords, achieving concessions that could include “blend and extend” strategies.

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CRE Report 11.21.2011

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News from SIOR, NAIOP, and Urban Land Institute conferences.

Bob – Walt, what do you have for us today?

Walt – Well, I went to the Society of Industrial and Office Realtors (SIOR) market review and outlook at the NAIOP meeting on Monday and the Urban Land Institute meeting on Friday so I got some great info last week and wanted to pass some of it along.

The key factor at both meetings appears to be the need for jobs to start to get us back on a road to recovery.  New Mexico could see more job losses in government sectors as all levels of government are feeling the pinch of cutbacks.

Another topic was the office market vacancy which is 18.3% and one of the reasons is emerging technologies, as workers are working more effectively with technology.  Workers are able to connect to the internet wirelessly almost anywhere.  This trend will continue to have an effect on the office market.

Bob – Walt, that trend of working from home has been around for some time, but hasn’t really caught on.  What’s different this time around?

Walt – This time it also involves all those 20 and 30 year olds that multitask and can work from anywhere at any time.  So working from wherever will continue to grow stronger and will have some negative impacts on office space.

Bob – You also mentioned the Urban Land Institute, what was the discussion at that meeting?

Walt – One interesting point from Mark Lautman  was that all the states around New Mexico are winning the site selection battle for new companies and are gaining jobs; unfortunately, New Mexico is not really in the game at this time. So we need to do something to get out of this scenario and start making New Mexico “the place” to relocate.

Todd Clarke also spoke about the strength of the apartment market and the need for at least 4,600 more apartments in Rio Rancho and 1,300 more apartments needed in Albuquerque.  There was also discussion on how the youngest of the adult population, the millineals,  they have a desire for less space and less things and that will affect  how apartments will be built in the future and also where.  There is a much greater demand for housing to be on transportation corridors and in developments that minimize driving.

Bob – Anything else for today and how can people contact you to talk about commercial real estate?

Walt – There were a couple of quotes that came out of the meetings, one that I would like to quote was regarding how Landlords need to make vacant space as appealing to tenants as possible.  Debbie Harms,SIOR, quote was,” You aren’t going to have to buy a prom dress for that pig yet, but you are going to have to put some more lipstick on it.”  So get those vacant spaces ready to lease, it will help!

If you want to talk about commercial real estate. Give me a call, Walt Arnold, 256-1255, website waltarnold.com you can also follow me on Twitter of find me on Facebook for up to date news on all things CRE.  Talk to you next week.