Albuquerque’s office comeback gains ground as post-COVID priorities shift

Employees of Albuquerque-based FBT Architects were itching to get back into the office following shutdowns spurred by the COVID-19 pandemic.

“We actually had our employees calling to ask if they could come back to the office,” said FBT Architects President Art Tatum.

It’s been five years since the nation shuttered during the start of the pandemic, a period that sent nonessential employees to work from home and left many offices empty. But now, as many companies continue to make their way back, local experts say Albuquerque’s office market is growing and looks different than it did before.

“We are seeing a big push for it now,” said Shóna Martinez, a senior associate and office expert with real estate firm CBRE.

Despite some fluctuation, Albuquerque’s office leasing activity has been steadily increasing since 2020, hitting a peak in the third quarter of 2024 and slightly cooling down since then, according to a report from CBRE.

Albuquerque’s vacancy rate for office space in the first quarter of 2025 was 13%, according to the CBRE report, slightly up from 2024 vacancy rates. However, the rate is still far below the 2025 first-quarter national vacancy rate of 19% and down from Albuquerque’s 2020 rate of 18% in the second quarter.

While companies are returning to the office, “almost every business” Martinez has worked with post-COVID has implemented a hybrid work model, she said.

“It is incredibly rare now to find a company that requires you to be in the office five days a week,” Martinez said, adding she is generally seeing a ratio of three days in the office, two days remote.

The industries flocking back to the office are those within professional and client-oriented services, including finance, legal, architecture and engineering, Martinez said. Meanwhile, she’s seeing medical groups and government workers continuing to work from home.

The north Interstate 25 corridor and Uptown have been Albuquerque’s strongest submarkets for office leasing activity coming out of COVID, Martinez said. A separate report on this year’s first quarter office market from real estate firm Colliers found the north I-25 corridor and Uptown submarkets leased more square footage than was vacated and respectively had office vacancy rates of 11% and 13%.

The submarket with the highest vacancy rate in Colliers’ report is Downtown at 24%. The area leased more space than was vacated in this year’s first quarter.

The reason for the high vacancy, Martinez said, is security. It’s a problem public and private officials aim to fix, hoping a Tax Increment Financing District and a proposed Business Improvement District can help spark life Downtown by incentivizing development and increasing services such as security, cleaning, maintenance and marketing.

“I would love to see nothing more than a safe and vibrant and walkable Downtown. I think we all want that because, in my opinion, that is the true heart of any city. But that’s just not the reality at the moment,” Martinez said.

One of Downtown’s most recent new tenants, FBT Architects, moved to the 15th floor of 500 Marquette NW in March. Michele Carter, the company’s director of marketing and business development, said the firm wanted to move Downtown to “be a part of the solution and not the problem.”

Tatum added, “We’re believers in revitalizing Downtown. ... We’re going to be an active part of that.”

The firm designed the space to include collaborative and private work spaces, conference rooms and living spaces, surrounded by 360-degree large window views of the city.

“I think that’s a lot of what COVID taught us — is that it’s not just offices,” Carter said. “You really need areas to come together. We’ve got huge couches. We’ve got places to just sit down and get comfortable.”

The type of space Carter is describing is Class A, premium office space that offers luxury amenities, layout and quality. This is the part of the office market that has seen the biggest shift since COVID, Martinez said.

“We have a shortage of Class A office space in Albuquerque, and the demand for Class A office space is far greater now than it ever was pre-COVID,” Martinez said.

Martinez said the reason for the demand is that companies are launching efforts to not only entice people back into the office but to retain employees with quality space, safety and amenities. She said she is seeing companies willing to pay more and prioritize quality space even over price.

One of the state’s largest Class A office owners and developers — Heritage Cos. — has been at the forefront of the luxury-driven back-to-the-office effort.

“We have seen our office occupancy grow since COVID,” said Heritage Founder and CEO Jim Long. “Our offices are over 90% occupied, and people are definitely coming back into the office.”

Heritage is in the process of updating its office spaces in Uptown and downtown Santa Fe with landscaping, food halls and casual meeting spaces.

“We’re creating these exciting, stimulating environments that people are enjoying coming back to work to experience,” Long said. “It’s hard working from home, to be honest with you, because people need to be around other people. They need that socialization, and we’re certainly seeing that.”

Goodman Realty Group, the developers of Winrock Town Center, are also contributing to the city’s office market with the recent completion of the Portland Building, which added 19,712 square feet of Class A office inventory to Uptown, CBRE’s quarter one office report said. The report added that Goodman has plans for a new 42,100-square-foot mixed-use project at Winrock that will include approximately 27,500 square feet of office space.

Martinez said more development of office space, particularly Class A, is needed to keep up with the growing demand. But skyrocketing construction costs since COVID are a limiting factor, making new office space projects “almost nonexistent.”

A solution, Martinez said, is more public-private partnerships, more incentives and less red tape for developers to spur office development, which she believes will eventually happen out of necessity. She also envisions companies getting creative, transforming retail and industrial spaces into the quality Class A or flex office space — flexible property that can accommodate multiple functions, such as retail, industrial, warehouse or office — that they need.

While collaboration and connectivity are common themes driving companies back to the office, Jeannie Randolph — principal of Brio Brokers Group, a local business brokerage that moved into a new office space in the Northeast Heights last year — said moving from her home office to a commercial office was also about something more.

“When you lease an office, and you sign a three-year lease, you really are taking a huge leap of faith,” Randolph said. “Somebody said to me, ‘You open an office and you bet on yourself.’”