Q4 2022 Office Space Report: Albuquerque, NM
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Albuquerque is home to major companies including SunBridge Healthcare Corp, Sandia National Labs, and Presbyterian Healthcare Services, among others.
Unemployment for Albuquerque was 3.1% in Q4. The metro area population was 942,000 in 2022.
At the end of Q4 2022, Albuquerque office space saw record-low vacancy, record-high absorption, and no new construction in the pipeline.
General Area Overview & Demographics
Albuquerque is the most populous city in New Mexico, with an estimated population of 558,545 as of 2019. The city has a diverse demographic makeup, with Latinos making up 47.3% of the population, followed by White (41%), Black (4.1%), Native American (2.7%), Asian and Pacific Islanders (2.7%), and other races (2.3%).
Albuquerque, NM Median Household Income & Population
According to the 2019 US Census Bureau, the median household income in Albuquerque is $51,818. The city also has a high poverty rate of 15.7%, which is higher than both the state and national average.
The city has a relatively young population, with 26.5% of the population being under 18 years old and only 10.7% aged 65 or older. The median age in the city is 33, which is lower than both the state (37) and national (38) average.
There are several higher education institutions in Albuquerque, including the University of New Mexico (UNM), Central New Mexico Community College (CNMCC), and several private colleges.
Attractions in the city include the Rio Grande Zoo, Sandia Peak Tramway, and Petroglyph National Monument. Visitors can also explore the city’s rich cultural heritage at Old Town Albuquerque or take a stroll through one of its many parks, such as Tingley Beach.
Albuquerque enjoys a dry, sunny climate year-round. The average high temperature in the summer is 87°F (31°C) and the average low in the winter is 24°F (-4°C). On average, Albuquerque receives 8.5 inches of rain each year with no snowfall.
Summary of Albuquerque Office Space Performance in Q4 2022
Vacancy for Albuquerque office space reached a record low of 10.7% in Q4.
The West Mesa submarket experienced the lowest vacancy rate at 2.5%, while the highest vacancy rate was in SE Heights at 25.4%.
Net absorption was at a record high in Q4 2022 at 578,402 square feet. Class B properties accounted for the highest amount absorbed at 424,170 square feet.
The South Valley submarket had the highest net absorption at 197,298 square feet.
What are office space rents like in Albuquerque?
The average asking rent for Albuquerque office space was $16.77 per square foot in Q4, the same as Q3.
The West Mesa submarket had the highest median asking rate at $19.00 per square foot. NE Heights had the lowest median asking rent at $13.50 per square foot.
Class A properties averaged $23.75 per square foot across all of Albuquerque’s submarkets.
Purchase & Leasing Activity
Nearly $15 million in sales volume for Albuquerque office space occurred in Q4 2022, with the median price per square foot at around $130.
The average sales price of Albuquerque office space properties for the year was around $3.1 million.
The majority of leasing activity in Albuquerque year-to-date has occurred in Class B and C properties. Activity for Class B has amounted to 568,000 square feet and Class C has had approximately 222,000 square feet in leasing activity.
Notable Office Space Deals in Albuquerque in Q4 2022
There were several notable deals that took place in Q4 2022 for Albuquerque office space:
- Convergys sold 63,345 square feet for $8.2 million.
- Three Woodward Center sold 5,879 square feet for $1.9 million.
- Tooth & Tail leased 13,359 square feet in the North I-25 submarket.
- Tru Security Inc. leased 12,553 square feet in the West Mesa submarket.
These are select examples among other activity.
New Office Space Development Activity in Albuquerque in Q4 2022
There have been no significant constructions or completions in the Albuquerque office market since 2018. Q4 had no new construction projects.
Potential new construction could happen as Netflix looks to expand its Mesa del Sol facility. This project is expected to include a 120,000-square-foot office space as well as several other large buildings.
Market Forecast for Albuquerque Office Space
The office space market in Albuquerque ended the year with mostly strong performance. Vacancy rates reached a record low and absorption rates reached a record high.
While there is little in the pipeline, a few big projects are expected in the coming year.
New Mexico will require its state employees to return to working regularly in the office post-pandemic in 2023. This will potentially set a trend for businesses to follow which will, in turn, likely secure current tenant need for space and stir up activity in sales and new or renewed leases.
Takeaways for Office Space Investors
Vacancy rates for Albuquerque office space have continued to trend downward since 2016, and there’s been little activity in new construction.
Overall availability may prove to be challenging for investors looking to acquire new property.
Do your research, stay diligent, and happy investing.
Find & Connect With Commercial Agents & Brokers in Albuquerque, NM for Free on MyEListing.com
MyEListing.com maintains one of the largest national databases of commercial agents & brokers in the country. Use it for free to find an agent or broker in Albuquerque, NM.
Other recent articles
Article Search
Share
All Article Categories
