The Urban Land Institute predicts the Albuquerque area’s development will trail other metros with much stronger economies in 2018, according to the organization’s new report on emerging real estate trends.
Of the 78 metros the report tracked as “markets to watch,” Albuquerque at least made the list. Ranked at No. 72, the Duke City is sandwiched between Tucson and Memphis. Buoyed by job growth, a diverse economy, the presence of well-known international companies headquartered there, and a young and well-educated labor pool, Seattle took the No. 1 spot.
In its ranking of eight Mountain region metros, Denver and Salt Lake City were at the top of the heap with green dots, a sign of improving and strong prospects, according to the 101-page report. Tucson and Albuquerque are at the bottom with yellow designations, or “fair.”
The report was highlighted at ULI New Mexico’s annual trends conference held Thursday at the Embassy Suites. Keynote speaker Anita Kramer, vice president of the ULI Center for Capital Markets and Real Estate, kicked off the program with a presentation that provided an outlook on real estate investment and development trends, real estate finance and capital markets and other real estate issues throughout the U.S.
The report is important for several reasons, said Kramer. One, real estate is often an indicator of where job growth and new business is — and is heading. Secondly, out-of-state investors, developers and others use the annual analysis as source for new markets to enter.
The report is compiled through survey responses and interviews of more than 1,600 investors, developers, bank officials, home builders and land developers across the U.S., said Kramer.
In terms of strengths, respondents said the “lower cost of living” in Albuquerque is an advantage to the economy. On the challenges front, respondents said capital, while available, “may be a little less accessible than during previous cycles” to fund new commercial construction in the city.
Said Kramer: “You need to do a better job of getting the word out. You have so much here to offer” to business prospects.
Despite the low score, a panel of local real estate experts discussed how some of these trends will affect the Albuquerque area and initiatives underway to move the needle in coming years, especially development that will use existing commercial space or prompt new construction.
Drew Dolan, president of Titan Development, talked about a recent $200 million equity raise that will fund some of the company’s Albuquerque projects. These include multi-family housing, senior living facilities and self-storage buildings. Titan is behind the $68 million Legacy @ Journal Center, a mixed-use development which is anchored by Cabela’s.
Dolan called for the cities of Albuquerque and Santa Fe to forge stronger links in attracting development. “We’re more competitive as a region” when we emphasize our respective strengths, he said.
Deborah Burns, who helped coordinate the recent US-China Business Matchmaking Summit, said the event gave New Mexico’s business community an opportunity to connect with 160 visiting Chinese delegates. “Coming out of the summit, we have over 100 business dialogues and six MOUs (memorandums of understanding),” which may mean commercial real estate will enter the picture at some point. “The matchmaking continues,” said Burns. “We’re trying to bring deals together as we speak.”
Several of the delegates from China are looking to tap into Albuquerque’s aviation expertise, she said. China, which lacks aviation schools, is planning to build 130 airports by 2025, and is desperate for trained pilots and other aviation personnel.