Home construction, youth employment and emerging industries drive growth
By Mike Cook
If you want Las Cruces to grow, there’s good news and bad news.
The bad news is, there are not a lot of new homes being built to drive commercial growth. And, the entire state continues to be dependent on shrinking government spending. The good news is, the medical industry is booming, along with eating out and the East Lohman Avenue area of the city. And, the Mesilla Valley Economic Development Alliance (MVEDA), the City of Las Cruces and other organizations are working to bring new jobs and businesses to Las Cruces — and they are having some success. These are all great conditions for the success of commercial real estate and investment properties.
Las Cruces is a “retirement community with a huge demand for medical services,” said NAI First Valley Commercial Real Estate Services Principal Jake Redfearn. He described that as a “trend that will continue … the next 10 to 15 years.”
Redfearn also said Las Cruces is part of a paradigm shift that is emerging around the country. For the first time, people are “more interested in spending money and time eating out than going to grocery stores and going home and cooking a meal.”
But, “the rest of Las Cruces is flat,” he said.
“We haven’t had a lot of traction with big-box (large retail businesses) or midbox,” which he said “follow rooftops,” or new home construction. The latest housing trends for Las Cruces show people are “trading houses” rather than building new ones. New housing permits are “far below what they were in 2005 to 2006,” Redfearn said.
“We need to pretty much double what we’re doing now to see new retail.”
Kary Bulsterbaum, associate broker with Steinborn TCN Commercial Real Estate, said Las Cruces also needs to lessen its dependence on government spending and expand its base to see more growth in the commercial and industrial sectors of its economy.
One in every four jobs in the state is dependent on the federal, state or local government. And, because of major budget reductions, especially at the federal level, New Mexico is recovering from the 2008 recession at “half the pace of the rest of the nation,” he said. “We’re about half-way home in terms of being … back to the good old days.”
Economic development should be “one of our community’s biggest focuses,” Bulsterbaum said, as the city and county look to diversity the local base. The area is getting “more and more looks” from aerospace companies, for example, he said, and the expansion of Union Pacific railroad in Santa Teresa and the border area is the “biggest economic development in the state.”
Bulsterbaum said one of the most important indicators of commercial and industrial growth is the office market.
Currently in Las Cruces, he said, there’s about a “600-day average stay.” That means most vacant offices stay on the market for more than a year-and-ahalf. The trend is about one year for industrial properties, and sometimes up to 900 days for B- and C-class retail properties. And, on average, they are going for about “70 percent of what people are asking,” he said.
“It’s not gloom and doom,” said Bulsterbaum. “We’re just not recovering at the same pace as other states, like Texas and California.”
One bright spot locally is higher education.
“Both the community college and New Mexico State are stalwarts of our economy in Las Cruces,” said Redfearn. “They’re good friends of ours. The students they put into the workforce, the huge employers they are in Las Cruces and the county, the programs they have, help us market ourselves better. (A locally trained workforce) “is a big thing to say when you are trying to recruit.”
Burrell College of Osteopathic Medicine (BCOM) “is going to be a really big feather in our cap,” said Redfearn, referring to the medical school that is under construction in the NMSU Arrowhead Research Park.