Absorption slows for office — vacancy predicted to rise this year
New years bring new excitement and new challenges, and 2022 will be no different in the Albuquerque office market. Average asking rates remained fairly steady from the 4th quarter of 2021, coming to $19.09 Full Service, but Q1 of 2022 saw only 2,188 square feet of absorption, signaling a slowdown from the positive absorption gains seen through most of 2021.
Key Factors in this Quarter
The new year has seen changes and challenges while reshaping from post-pandemic influences. Q1 had a small positive absorption of 2,188 square feet, indicating a slowdown from 2021’s momentum.
Vacancy is forecasted to increase since several high density employers are expected to vacate; smaller tenants are driving leasing activity. Inflation, increasing construction and material costs, and supply chain issues have caused delays and modifications to tenant improvements.
Uncertainty is keeping lease terms short with flexible options. Call centers have adjusted to working from home during the pandemic, leaving approximately 450,000 square feet of leased space being marketed.