Wanted: Commercial real estate developers

LAS CRUCES >> It’s a matter of space, and Las Cruces needs more. Local commercial real estate agents last week provided a snapshot of the city’s available space. The need for available, ready-to-occupy commercial property space continues to increase, but is problematic until the city sees more population growth. 

During a Mesilla Valley Economic Development Alliance meeting, Davin Lopez, president and CEO, said a significant hurdle in attracting new businesses is a lack of immediately available commercial real estate properties. 

“We have a need for spec space,” he said.

Jake Redfearn, with NAI 1st Valley, said that commercial rentals in recent years have tended to be medical offices with some other retail spaces being created. But it has been more difficult to attract general retail due to a lack of immediately available space.

“Outside of medical, it’s been pretty flat for the past three to four years,” Redfearn said. “It hasn’t been bad, hasn’t been terrible, but it’s been consistent.”

There is not a lot of vacancy in retail spaces currently, with the exception of a couple of developments that are underway. One of the challenges, Redfearn said, is the fact businesses want high-profile locations which are, by and large, lacking open space for construction.

“They want it to be on Lohman. That’s where every major retailer wants to be, whether it’s a big-box store or a small market,” he said. “In order to get there at this point you have to find a property you can redevelop.”

And that high-profile corridor is quickly filling up. The latest parcel is next to the Arroyo Plaza, where Verizon is constructing a new building where the former Weinerschnitzel sat. Spaces like that are “becoming more scarce than they were 24 months ago,” Redfearn said.

Other areas of town are also in line for development in coming years, he said.

On the University Avenue corridor, the coming Burrell College of Osteopathic Medicine will bring more teachers, doctors and year-round students. The area around the new Wal-Mart on the East Mesa is primed for development as well, but comes with a few bumps in the road.

“The challenge we’ve had out there is the (residential) growth is going slower,” Redfearn said. “Without any kind of bigger population growth out there it’s hard to get attention … but it’s coming. It’s moving and we’ve got deals going.”

Along Main Street around the former Las Cruces Country Club, the redevelopment will invigorate the area and the medical and residential development will help drive growth.

“That will reinvigorate that area,” Redfearn said. “It’s a shot in the arm. Because of where it’s located, in a dense area, we obviously have some retailers interested in the area.”

The west side, traditionally, is slower to grow and trends toward sit-down restaurants, and the El Paseo corridor redevelopment is an opportunity to make the area more desirable to new development, Redfearn said.

Overall, Redfearn said industrial space is needed in the Santa Teresa area and the city needs speculative office space largely geared toward medical providers on the northeast side of the city. Retail is needed, and starting to develop, near the Wal-Mart and along U.S. 70 near Sonoma Ranch and Rinconada exits.

The bright spot in commercial space currently comes from the medical fields, said Kary Bulsterbaum, a broker with Steinborn Commercial Real Estate.

“Because there is a need, or desire, to be in higher-profile locations, they’ve done a lot of new construction on U.S. 70 and Valley,” he said. “You’ve definitely seen them absorb existing centers. On Lohman (Avenue) they’ve absorbed shell space. From Foothills (Drive) and Lohman (Avenue) up to Roadrunner (Parkway) … a large percentage has been absorbed.”

A new development is in the works near the intersection of Don Roser and East University Avenue which will house four or five 2,500-square-foot buildings for a dental and orthodontic complex, Bulsterbaum said. And there are plans in the works for Memorial Medical Center and University of New Mexico Hospital to collaborate on a cancer center in roughly 50,000 square feet of existing shell space off of Roadrunner that has been vacant since 2006, he said.

But the challenge remains luring investors to spend hundreds of thousands, or even millions of dollars to create technologically adequate spaces that are ready for tenants to move in immediately.

“It’s not exactly an easy proposition,” Bulsterbaum said.

Jason Gibbs may be reached at 575-541-5451.

Soruce: Las Cruces Sun News