Apr 21, 2015, Damon Scott, Reporter- Albuquerque Business First
Almost 381,000 square feet of build-to-suit industrial warehouse space has been proposed on a plot of land in Albuquerque’s South Valley.
Jim Smith, the industrial specialist at CBRE New Mexico, is working with C & S Real Estate & Development on the massive project that would consist of three buildings ranging from 108,000 to 163,000 square feet each.
The project is important to the Albuquerque area’s market as most of its desirable industrial buildings, with high ceilings and other amenities, have been gobbled up. And there’s no speculative construction on the horizon, as asking lease rates for the more updated stock are much less than what a new building would cost to construct. “No developer is crazy enough and no bank would be willing to loan on those types of buildings,” he said.
Build-to-suit shells, though, can give prospective companies a more ready-to-go option, with a shorter timeline for construction completion.
The build-to-suit project is located in the South I-25 corridor where much of the city’s industrial activity has been taking place. US Foods is operating there, as well as Admiral Beverage Corp. and auto parts provider LKQ. The corridor has started to catch up on the retail end as well, with Las Estancias continuing to add to its retail and restaurant lineup at Coors and Rio Bravo boulevards.
The shells that C & S would build would offer ceiling heights of 28 feet and other specs that companies looking for build-to-suit space want, Smith said. “Most of the newer industrial buildings built after 2000 that have more than 22 or 24 feet of height are at about 3 percent vacancy [in the Albuquerque area],” Smith said. “The older stuff has been vacant for three or four years.”
Smith says “flat is the new up” in the industry. “There’s not a lot of activity and the median industrial transaction size has trended down since 2011. There are not a lot of big companies moving around for the most part,” he said. Smith added that for every Nova-moving-into-a-Schott-building type transaction, there are 50 transactions of 1,500 to 3,000 square feet. Nova Corp. recently moved its data center operations to the former Schott Solar building at Mesa del Sol. “It’s musical chairs with not a big influx of new users. We’re recovering slowly,” said Smith.
