Following steady year, Albuquerque commercial real estate brokers ‘cautiously optimistic’ about 2026

Steady, tumultuous, dynamic, transitional and promising — these are some of the words local brokers used to describe Albuquerque’s commercial real estate industry in 2025.

“I thought it was better than expected,” said DJ Brigman, last year’s Commercial Association of Realtors New Mexico president. “I thought we were going to have a slow year, and we had a steady year. I think a lot of that has to do with the fact that Albuquerque is a resilient city.”

Commercial real estate refers to property used for business purposes, which includes offices, shopping centers and warehouses.

‘Cautiously optimistic’

It was a flat year for the city’s retail market, with a slightly higher deal volume, according to Colliers Senior Vice President and Principal Ben Perich.

Perich characterized the year as transitional, largely due to challenges including high construction and labor costs and rising property taxes. The latter half of 2025 saw many local business closures, but new tenants and concepts also entered the market — a trend Perich thinks will continue this year.

“When you have this transition, spaces start to turn over and it facilitates some new concepts,” Perich said. “As players start to move around and as properties change, that does create some deal volume.”

Some “market-moving” projects from 2025 that Perich said to keep an eye on this year include renovations and incoming tenants at Cottonwood Corners shopping center on the West Side, further development at Park Square Market food halls in Uptown and the construction of the Lobo Crossing retail center on the University of New Mexico’s South Campus, Perich said.

“There’s a lot of good new stuff coming in,” Perich said.

In 2026, Perich anticipates similar challenges related to cost pressures, little new construction, increased leasing activity and property owners getting creative with retrofitting and redevelopment projects.

“Cautiously optimistic is my attitude toward 2026,” Perich said.

Seven is the new five

Cost-related challenges were also a standout factor for the office market last year, according to CBRE Vice President Scott Whitefield.

The amount of money it takes for landlords to improve and prepare office space for tenants has risen dramatically over the last several years, Whitefield said. Class A office space that would have leased for $23 per square foot just a few years ago is now leasing for $26 per square foot.

One of the ways landlords are maintaining reasonable rental rates while offsetting tenant improvement costs is by signing tenants for longer terms.

“My business partner and I have often made reference to the fact that seven is the new five,” Whitefield said. “Normally, we sold for a five-year term, and now — more often than not — we start talking about seven-year terms fairly early in the negotiation.”

Larger office spaces saw more activity than smaller office spaces in 2025, and vacancy rates also continued to tighten throughout the year, Whitefield said.

“I’m bullish on (2026),” Whitefield said. “We think there’s going to be a fairly active market. It’s going to be an increase over last year is how we view it.”

Tight market, fewer options

For Colliers Vice President Tom Franchini, some trends from Albuquerque’s industrial market last year included low supply, fewer sales, increased leasing activity and pricing, and minimal high-quality infrastructure.

“There aren’t a lot of choices. We’re starting to see more… (but) there’s a big discrepancy between Class C space and Class A space,” Franchini said. “Our sales were down in terms of selling industrial properties. It wasn’t because of a lack of demand — it was just a lack of product. Our leasing was up quite a bit.”

Franchini expects consolidation of New Mexico’s cannabis industry — which grew quickly after the legalization of recreational cannabis in 2021, creating what some industry experts call an oversaturated market — to open up and bring more industrial space onto the market in 2026.

‘Reach for the skies and strive for the moon’

Overall, local brokers agreed 2026 will likely present similar challenges associated with high costs, little new construction and broader economic uncertainty. But the brokers are also optimistic about the prospect of lower interest rates and some of the big projects and economic drivers — like Pacific Fusion — coming to the Albuquerque area.

Prakash Sundaram, a local developer who just started his term as president of NAIOP New Mexico this month, echoed the latter sentiment.

“I’m an eternal optimist, so I think it’s going to be a great year,” Sundaram said. “I’d like to see the community really come together, an increase in overall deal velocity and more companies considering locating to Albuquerque. We have a great community here and I’d like to see us continue to build on that and reach for the skies and strive for the moon.”

Kylie Garcia covers retail and real estate for the Journal. You can reach her at kgarcia@abqjournal.com.