Market tightens for industrial space in ABQ
2021 is shaping up to be a great year for industrial property owners in Albuquerque. Low vacancies and higher demand has driven lease rates up approximately 20% this year.
A lack of new construction over the past decade along with an increase in recent demand has driven industrial vacancies to historic low. The Albuquerque metro area averaged 246 listing each month from July 2019 to November 2020. Since March 2021, the average was 192 listings and listings dropped to 176 for July 2021. Some recent demand stems from new to market users like Amazon along with expansion from companies already in the market. In addition to its new distribution facility being built on Albuquerque’s Westside (measuring 2,325,000 SF – 465,000 SF in 5 floors), Amazon has leased 45,000 SF in the Meridian Business Park for a last mile distribution facility. Companies currently looking for existing industrial space are having a very difficult time finding any alternatives.
New construction is underway to help accommodate the demand. A brand new 150,000 SF Class A industrial building at 7200 Bluewater NW is under construction by Brunacini Development. In addition to Brunacini Development’s project at 7200 Bluewater NW, there are multiple other industrial developments that are currently in the planning stages.
Although building costs have soared this year, Quality Fruit and Vegetable Company is well under way with the construction of its new 18,667 SF facility located at 541 Silver Creek NW. The Quality Fruit facility will be completed later this year and includes a 9,484 SF suite that is available for lease.
Other industrial users have expanded their options by repurposing existing spaces to suit their needs. Recently office and retail locations have been acquired for industrial users. A former 30,000 SF office building at 3901 Singer NE has been purchased by Affordable Solar for its headquarters and a portion of the building will be converted to warehouse to accommodate Affordable Solar’s warehouse needs. The former JC Penney Home Store location at 3101 Menaul Blvd NE is being converted from a retail use to a warehouse use for a new industrial tenant. Out-the-box thinking will help industrial users find solutions to suit their needs.
At Johnson Commercial Real Estate we pride ourselves on creative solutions for our clients. Are you looking to buy or sell? Erick Johnson, CCIM, SIOR is the broker you can trust to help you with your commercial real estate needs.