PNM to vacate downtown ABQ building

ALBUQUERQUE (KRQE) - Albuquerque office buildings are getting increasingly empty with the highest amount of office vacancies in about 20 years, according to statistics from a commercial real estate firm tracking the numbers.

The vacancy rate is about to grow even more, with PNM planning to move out of one of downtown Albuquerque’s biggest buildings.

“The office market is experiencing the biggest challenges,” said Ken Schaefer, Director of Brokerage Services for Grubb & Ellis New Mexico.

Grubb & Ellis says the citywide vacancy rate is 18.8 percent, but the numbers are even higher for the city’s busiest business districts.

Uptown’s vacancy rate is 23.6 percent.

Downtown’s vacancy rate is 21.9 percent, and the number is expected to grow dramatically once PNM exits the eight-story Alvarado Square building in the heart of downtown.

New Mexico’s largest utility company is consolidating all of its downtown employees from two buildings into one.

Soon Alvarado Square will be completely empty.

“The two buildings we occupy downtown had a 40 percent vacancy rate, so it just wasn’t efficient use of the space,” said Valerie Smith, PNM Director of Communications.

The company’s workforce dropped by almost 1,000 employees when the company sold off its natural gas business in 2009.

Now PNM is moving employees out of Alvarado Square and into the company-owned 12-story building next door. PNM’s 30-year lease for Alvarado Square expires in 2015.

The move is expected to eventually save the company about $3 million every year.

It turns out many companies are doing what PNM is doing and cutting down on space.

Others have either laid off employees, moved away, or shut down completely.

“Office vacancy rates are directly tied to unemployment,” said Ed Anlian, Senior Associate for Grubb & Ellis New Mexico. “Until the unemployment levels return to 4 percent or 5 percent it’s going to be difficult to fill up buildings.”

PNM”s move out of Alvarado Square will leave downtown with a giant amount of available office space.

According to numbers provided by Grubb & Ellis, the 250,000 square-foot building accounts for about 9 percent of downtown’s office space.

But the real estate firm sees it as an opportunity, too.

“We’d like to sell it to an owner-user, or lease it to a single tenant that currently doesn’t have a presence in Albuquerque,” Schaefer said.

A single tenant would mean a new, major employer for the city.

According to Schaefer, having a downtown office building completely available is a good thing to offer big companies considering a move.

No one knows how long that will take.

PNM is planning to vacate Alvarado Square by the end of the year and says the want to see the building occupied.

“We want a vibrant economy. Because the more vibrant the economy, the better our business is,” PNM’s Valerie Smith said.