Downtown a bright spot in ABQ office market
By Richard Metcalf
Journal Staff Writer
A real dark horse has emerged this year as the top-performing submarket for office space in the Albuquerque metro area, according to the latest Office Trends Report from Colliers International.
Downtown, which chronically underperforms the office market as a whole, has shown more improvement through the first nine months of 2014 than any other office submarket, including the North I-25 corridor and Uptown.
“Vacancy has declined every quarter this year and Downtown has also posted the highest amount of space absorbed (or occupied),” the third-quarter Colliers report says, attributing the improvements to initiatives related to developing Albuquerque’s technology sector.
The CNM STEMulus Center’s move into the First Plaza Galeria earlier this year contributed to the brightening Downtown office scene. (Albuquerque Journal File)
Just over 20,000 square feet of office space were occupied in the second and third quarters by Fat Pipe ABQ, an incubator and collaborative for information-technology businesses at Old Albuquerque High, and Central New Mexico Community College’s STEMulus Center, a workforce training center at First Plaza Galeria.
The upshot is that, since the end of 2013, the Downtown office submarket has registered a net gain of 120,000 square feet of space filling up, according to Colliers data. The vacancy rate dropped from 29.4 percent at the end of 2013 to 26.1 percent in the third quarter.
Over the same period, the metro’s overall office market languished. More space went vacant than filled up to the tune of 295,000 square feet. The metrowide vacancy rate climbed from 19.3 percent at the end of 2013 to 21.5 percent in the third quarter.
Downtown’s high vacancy rate – 26.1 percent versus 21.5 percent overall – is largely the function of one property: the eight-story, 246,853-square-foot Alvarado Square at 415 Silver SW. After leasing it for decades, PNM Resources moved out last year after selling off its natural gas distribution system.
If Alvarado Square were to disappear from its inventory of office buildings, the Downtown submarket would suddenly look relatively robust.
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