ABQ retail market did well in 2013

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Demand for space in shopping centers and other types of retail buildings boosted 2013 to the best year for retail real estate in the Albuquerque metro area since the 2000s, according to the latest Retail Marketview report from commercial real estate services firm CBRE.

The vacancy rate for the broad retail market dropped from 11.5 percent at the end of 2012 to 11.1 percent at the end of last year, despite 2013 ending with the closing of a 84,000-square-foot Kmart store and another roughly 100,000 square feet going empty from seasonal store closings.

Strong space demand led the market to an annual net absorption of 378,330 square feet (of retail space), which is the highest since 2007, the CBRE report says. Construction completions exceeded 300,000 square feet, which is the highest since 2009.

For comparison, the average retail vacancy rate nationwide was 12 percent in the fourth quarter of 2013, according to CBRE Econometric Advisors.

Locally, more than a third of last years gross retail activity was concentrated in the Uptown submarket off the Louisiana NE and Interstate 40 interchange. The free-standing 155,481-square-foot Target store opened in 2013, as did Gordmans and Dicks Sporting Goods stores at Coronado Mall.

While retail real estate is continuing to recover, it does not appear to be generating much in the way of jobs, according to state labor data. The metros retail employment sector gained 100 jobs year over year as of December but at 41,800 workers, retail employment was still 11 percent below the peak of 47,000 jobs in December 2007.

From a bricks-and-mortar perspective, the retail market is expected to continue to improve in 2014 as national retail chains expand their existing presence or enter the metro.

Redevelopments of older centers will house new anchor tenants and the activity level is expected to remain steady, creating downward pressures on vacancy rates, the CBRE report says.

Asking lease rates varied at the end of 2013 from $8.50 a square foot to $29.50 a square foot, depending on the type and quality of the retail property, CBRE reports. The range was tighter at both the low and high ends compared to the end of 2012.

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ABQ retail market did well in 2013