Retail Space Vacancy Rates Drop to 7.26%
The third quarter of 2019 saw 46,419 square feet absorbed, dropping the vacancy rate 15 basis points from 7.41 percent to 7.26 percent. Asking rental rates average $15.11 per square foot NNN.
The majority of third quarter’s absorption was realized at Cottonwood Mall, where Mor Funiture for Less opened its 20,000 square foot showroom. This was the last remaining space in the former Macy’s space, which was vacated in 2017. M&J Bridal occupied just under 6,000 square feet in the space vacated by Forever 21, which expanded into a 12,000 square foot space at Cottonwood Mall in the fourth quarter of 2018.
Forever 21 filed for Chapter 11 bankruptcy in September 2019. The fast fashion retailer announced 350 store closures nationwide. The only New Mexico closing announced is at Santa Fe Place at 4250 Cerrillos Rd. Eco friendly fashion and second-hand fashion markets are growing and expected to exceed the fast fashion industry over the next ten years.
At Coronado Center, Furniture City has announced that it will occupy the entirety of the 75,000 square foot space vacated by Sears. The new location is Furniture City’s second location and gives them a bigger showroom space.
M’Tucci’s Restaurants announced it will open its fifth location at the 10,000 square feet 4939 Pan American Freeway NE, the former site of Chama River Brewing Co, which closed in August of 2017. The restaurant will be able to accommodate about 250 guests indoors and will offer patio seating that can accommodate another 75 to 100 guests and will open early next year.
The Sawmill Market, a 34,000 square foot public market in a restored lumber building north of Old Town that plans to open in February of 2020, has added eight new tenants to it’s food hall. Mr. Powdrell’s BBQ, Simply Olive Oil, Spur Line Supply Co., Estella Floral Design, XO Waffle, Blue Door Patisserie, Botanic Bar, and Flora will bring the total tenants up to 20, all of which are New Mexico based companies. Only one space remains to be filled.
Urban Air Trampoline & Adventure Parks, Albuquerque’s first indoor skydiving park, opened its 35,000 square foot facility along Interstate 25 next to Main Event at the tail end of the quarter. The developers have announced they’ll be looking at additional projects in the vicinity, including restaurants, retail, and hotels.
Revel, a new $12.2 million food, beverage and entertainment venue, will remodel the now vacant Sports Authority space 4720 Alexander Blvd. NE into a 55,000 square foot space that will serve as a concert hall, brewery, dining space, and more. Revel is set to open in first quarte of 2020, with the concert venue following later in the year.
A new 6,000-square-foot brewery and restaurant concept is headed to the westside, at 3421 Coors Blvd. NW. Sobremesa will have outdoor seating and an additional 4,000 square feet of flex event space for company events or birthday parties. The brewery’s opening is planned for Spring 2020. Red Door Brewing Co. opened their new 2,300 square feet downtown location at 509 Central Ave NW in September, where it’s added food from Kamikaze Kitchen and Food Truck to its menu.
50/50 Coffee House & Pub opened its new 3,000 square foot space at 2122 Central Ave. SE in August. The university area shop will serve coffee and beer, as well as a seasonal menu. California-based chain Fatburger opened their first location in New Mexico at Isleta Resort & Casino as part of the food court. After much anticipation, Ten 3, the newest restaurant on top of Sandia Peak, opened its doors in August, replacing the previous restaurant High Finance.
The 2019 holiday season is projected to be strong and spending is expected to grow by over 3 percent. Experiential retailers will benefit from holiday spending as well. According to a Holiday Purchase Intentions Study by NPD, 46% of consumers plan to give intangible gifts, like food and beverage experiences and charitable donations.
Key factors this quarter
Mor Furniture for Less opened its newest location at Cottonwood Mall, occupying the last 20,000 square feet of the former Macy’s space. This was the largest absorption of the quarter.
Furniture City, another furniture retailer, announced that it leased 75,000 square feet left vacant by Sears and Coronado Center.
Experiential retailers are on the rise, this quarter Urban Air Trampoline and Adventure Park opened its 35,000 square foot new construction location at 3930 Pan American Fwy NE and Revel announced that it would transform 55,000 square feet at the former Sports Authority at 4720 Alexander Blvd into an entertainment venue.