The commercial real estate market in Albuquerque, New Mexico continues to show strength, according to CBRE. Office space occupancy declined for the third consecutive year in 2018 and Class A vacant space is the lowest in market history. Demand arises from a net increase of 10,000 jobs in the Metropolitan Statistical Area. Office-using sectors have added jobs for 42 consecutive months.
Job growth is reflected in industrial property performance as well. The vacancy rate for industrial properties declined to the lowest level in recent market history, to 4.6% in 2018 from 5.64% in 2017. Demand has created a shortage of high-quality modern industrial space. Build-to-suit projects are filling the gap, with nearly 1.9 million square feet of owner-user space under construction.
The construction activity and job growth are positives for hotel performance. The Albuquerque, N.M. hotel market posted a 5.2% increase in RevPAR in 2018 compared with 2017. Occupancy was flat at 65%, but ADR registered a 6.2% increase. The hotel market strengthened further in 2019. Occupancy increased 3.4% through June 2019 compared with the same period in 2018 and ADR increased 4.8%. The combination of growing ADR and occupancy powered a 9.3% increase in RevPAR compared with June 2018.