Albuquerque Commercial Office Space for Rent

Q4 2025

Albuquerque Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Albuquerque commercial real estate (CRE) market in late 2025 is characterized by divergent trends: the Industrial and Multifamily sectors are stabilizing after periods of high activity, while Retail is navigating a shift in momentum. The industrial market is finding equilibrium, with vacancy rates dropping to just over 4% as the region digests new supply [3]. Retail fundamentals remain tight with availability at 3.5%, though net absorption flipped negative in Q3 2025 for the first time in recent quarters [4]. Office activity is resilient despite challenges, recording positive net absorption driven by government and business services demand [2]. Multifamily rent growth is outpacing the national average at 1.8%, though an influx of new units is temporarily pressuring vacancy rates [5].

TenantBase Proprietary Data [7] highlights the distribution of active tenant demand over the last 90 days:

  • Warehouse led market activity with 52.17% of all searches [7].
  • Retail/Storefront was the second most active sector at 43.48% [7].
  • Office accounted for a minimal 4.35% of total search volume [7].

Office Market

Market Overview Albuquerque's office market is demonstrating surprising resilience, bucking some national trends with positive absorption, although vacancy dynamics vary significantly by submarket.

  • Vacancy & Absorption: The market recorded positive net absorption in Q3 2025, continuing a trend of third-quarter gains observed since 2022 [2]. While the overall vacancy rate contracted slightly, the Downtown vacancy rate rose to 22.6% due to a large corporate exit, whereas suburban submarkets like North I-25 and Uptown remained stable at 11.7% [2].
  • Leasing Drivers: Demand is heavily skewed toward governmental and business users. Class A leasing volume nearly tripled in Q3, indicating a "flight to quality" despite Class A rental rates contracting for the third consecutive quarter [2].
  • Tenant Activity: TenantBase data reflects the sector's quiet nature, with minimal inquiry volume.

TenantBase Activity [7]

  • Demand Share: Office accounted for just 4.35% of total search volume [7].
  • Lease Term Preference: The limited activity was evenly split between Less than one year and 5+ Years, suggesting a market divided between temporary users and those seeking long-term stability [7].

Industrial & Warehouse Market

Market Overview The industrial sector remains a cornerstone of the Albuquerque economy, transitioning from a peak vacancy period into a phase of stabilization.

  • Vacancy & Trends: After peaking at 4.91% in late 2024, the industrial vacancy rate dropped to just over 4.0% in mid-2025, signaling market stabilization [3].
  • Supply Dynamics: There is an oversupply of large bulk spaces (50,000+ SF), while demand is strongest for units under 5,000 SF, where availability is much tighter [3].
  • Growth: The region's warehousing and storage sector has grown 287% over the last five years, solidifying Albuquerque's role as a strategic logistics hub [3].
  • Leasing Highlights: TenantBase data confirms the strong demand for warehouse space, particularly for short-to-mid-term leases.

TenantBase Activity [7]

  • Demand Share: Warehouse accounted for 52.17% of total search volume [7].
  • Lease Term Preference: Tenants favor flexibility:
    • 1-2 Years: 50.00% of deals [7].
    • 3-5 Years: 30.00% of deals [7].
    • 2-3 Years: 20.00% of deals [7].
  • Size Requirements: The average lower size requirement for warehouse space is 2,000 SF, aligning with the broader market trend favoring smaller units [7].

Retail Market

Market Overview Albuquerque's retail market is tight but experienced a "momentum shift" in late 2025, with absorption turning negative despite low availability.

  • Vacancy & Availability: The availability rate remains low at 3.5%, reflecting a market with limited options for tenants [4].
  • Absorption: Net absorption flipped to negative 40,000 sq. ft. in Q3 2025, a sharp contrast to the positive 160,000 sq. ft. absorbed in the previous quarter [4].
  • Rental Rates: Average asking rents cooled slightly to $16.83 per sq. ft., decreasing by $0.19 quarter-over-quarter [4].
  • Construction: Development activity picked up, with 29,000 sq. ft. of new space delivered in Q3 [4].

TenantBase Activity [7]

  • Demand Share: Retail/Storefront activity was robust, accounting for 43.48% of all search volume [7].
  • Lease Term Preference: Retail tenants show a preference for mid-term stability:
    • 3-5 Years: 50.00% of deals [7].
    • Less than one year: 25.00% of deals [7].
    • 5+ Years: 25.00% of deals [7].
  • Size Requirements: The average lower size requirement for retail space is 1,000 SF [7].

Multifamily Market

Market Overview The multifamily market is navigating a supply wave, which is pressuring occupancy but has not derailed rent growth.

  • Rent Growth: Albuquerque rents rose 1.8% year-over-year in July 2025, more than double the national average of 0.8% [5]. The average asking rent stands at $1,394 [5].
  • Supply & Vacancy: Developers delivered nearly 1,000 units in the first half of 2025, with another 3,000+ under construction. This influx caused occupancy to slide 30 basis points to 94.7% [5].
  • Outlook: Fundamentals are expected to improve as the construction pipeline slows, setting the stage for returned rent growth in 2026 [6].

2026 Outlook

Looking ahead to 2026, the Albuquerque market is positioned for steady performance and strategic growth.

  • Multifamily Recovery: With the current wave of construction tapering off, vacancy is expected to tighten, supporting a return to stronger rent growth in 2026 [6].
  • Industrial Expansion: The region's role as a semiconductor and manufacturing hub will continue to drive industrial demand, particularly for smaller and mid-sized suppliers [3].
  • Economic Drivers: Job growth is projected to increase by over 10% in the next decade, providing a long-term tailwind for all commercial real estate sectors [3].

Sources

  1. WFG National Title Insurance Company: Commercial Market Review Q3 2025
  2. CBRE: Albuquerque Office Figures Q3 2025
  3. NAI SunVista: Land/Industrial 2025 Q2 Market Review
  4. CBRE: Albuquerque Retail Figures Q3 2025
  5. Yardi Matrix: Albuquerque Multifamily Market Report September 2025
  6. Northmarq: Improving Fundamentals Follow Multifamily Construction Slowdown
  7. TenantBase Proprietary Market Data (Albuquerque - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.