National headlines have been quick to declare office real estate “dead.”
But here in Albuquerque, the reality on the ground tells a different story.
Recent reporting from Albuquerque Business First highlights a key point many outside observers miss: Albuquerque’s office vacancy rates have returned to near pre-pandemic levels. While other markets continue to struggle with oversupply and declining demand, our local office market has remained comparatively stable.
According to Jeremy Salazar, that stability is creating opportunity—for tenants, owners, and investors who understand how to read local conditions instead of national narratives.
Office Isn’t Dead — It’s Misunderstood
“One of the biggest misconceptions right now is that nobody is using office space anymore,” Salazar explains. “That might be true in some major metros, but Albuquerque never saw the same vacancy spike other markets did.”
The data backs this up. Office vacancy rates across much of the metro are comparable to where they stood before the pandemic. Yet despite this, office values remain under pressure—not because of weak demand, but because lenders remain cautious.
This disconnect between perception and reality is where smart decision-making comes into play.
Why Lender Skepticism Creates Opportunity
Salazar points out that while banks are still hesitant about office properties, that caution has more to do with national sentiment than local fundamentals.
“Values are being held down by skepticism, not performance,” he says. “For buyers and owner-users, that can create a window where pricing and negotiation power are more favorable than they’ve been in years.”
For tenants, this can translate into better lease terms, increased flexibility, and opportunities to secure space in higher-quality buildings that may have been out of reach in stronger cycles.
Repositioning Office Space for Stability
For owners facing elevated vacancy—particularly in older or less competitive buildings—Salazar emphasizes the importance of repositioning.
One of the strongest trends moving into 2026 is medical office conversion. Demand for medical space in Albuquerque remains high, while supply stays tight. This has led many owners to successfully reposition traditional office assets into medical or “medtail” uses, creating more stable, long-term tenancy.
“If you’ve got an office building with significant vacancy, making it attractive to medical tenants can be a smart play,” Salazar notes. “Medical users tend to be more stable, and the demand is absolutely there.”
What Tenants and Owners Should Expect in 2026
Timing matters more than ever.
Salazar advises office tenants to plan ahead—especially owner-users. Smaller users should expect six to nine months for renovations and negotiations after identifying a space. Larger users should plan for a year or more.
New office construction is expected to remain limited in 2026 due to high costs and modest population growth, meaning the best opportunities will come from existing inventory and smart repositioning rather than new supply.
The Bottom Line: Local Insight Matters
The biggest takeaway heading into 2026 is simple: Albuquerque’s office market does not follow the same rules as larger, headline-driven metros.
For tenants evaluating their next move, for owners deciding whether to hold, sell, or reposition, and for businesses planning for growth, local expertise makes the difference between reacting to fear and acting on facts.
As Jeremy Salazar puts it, “The opportunity is in understanding what’s actually happening here—not what people assume is happening everywhere else.”
Read the full article from Albuquerque Journal here: https://bit.ly/4bYk8OD