Albuquerque Seeks Solid Ground
A slow population growth, scarcity of new inventory and modest employment gains continue to position the metro’s multifamily market among the weakest in the country.
Underperforming against the national average, Albuquerque’s multifamily market continues to be one of the least dynamic in the country. The slow population growth, scarcity of new inventory and modest employment growth are among the reasons why activity in the metro is sluggish. However, the spillover effect is driving some growth in the southern and central submarkets, where several large investments are underway.
Job gains have been concentrated in the professional and business services and mining, logging and construction sectors. One Central—one of the largest public-private investments underway in downtown Duke City—is starting to materialize. The metro’s new rapid transit system, which runs down the iconic Route 66 corridor, is expected to be in full service this year, which is likely to spur additional development. Los Lunas is another sought-after submarket, since Facebook began work on its $28 billion data center. Here, a 1,420-acre rail-served industrial park is also attracting manufacturing and distribution companies.
Following 2015’s cycle high of 1,223 units, deliveries have decelerated quickly. As of May, 1,122 units were under construction, but Yardi Matrix expects fewer than 700 of them to come online by year’s end. Due to the shortage of new supply, we expect rents to rise 2.7 percent in 2018.