Office market continues to see positive absorption
The final quarter of 2021 saw positive absorption in the Albuquerque office market, continuing to signal activity and recovery from the uncertainty of COVID-19. Approximately 35,638 SF was absorbed through a variety of mid-sized deals, and average asking rates fell slightly to $19.10 Full Service. The final vacancy rate came to 13.84%, down 18 basis points from last quarter. This continues a downward trend in vacancy rates, with this quarter’s being the lowest in the office market since 2009.
Key Factors in this Quarter
The final quarter of 2021 saw positive absorption primarily driven by Raven Defense, a supplier of electrical defense systems, that signed a 10-year lease for 25,000 square feet at 4411 The 25 Way.
Leasing activity was also driven by small office users with the majority of activity concentrated in spaces under 5,000 square feet. The number of small businesses and startups has increased by nearly 25% over 2020.
Rental rates dipped down slightly and are likely to hold as construction costs for buildouts and other operating expenses are continuing to increase.