By Stephanie Guzman / Albuquerque Business First Reporter, Wednesday, September 21, 2016 at 2:44pm
ALBUQUERQUE – The principals of Allen Sigmon Real Estate Group purchased an 84,000-square-foot business park in Albuquerque as part of a 1031 exchange.
A 1031 exchange allows real estate investors who recently sold a property to reinvest the money made from the sale into a new property without being taxed.
Allen Sigmon, an Albuquerque-based real estate group founded by Brad Allen and Lance Sigmon, originally sold a 150,000-square-foot industrial complex in Rio Rancho. They then started looking for a new property to reinvest.
The investors found Jefferson Business Center, located on five acres on the northeast corner of Jefferson Street and McLeod Road. The purchase price wasn’t disclosed, but the property was listed for $5.3 million. Financing for the purchase was provided by Justine Deshayes of Wells Fargo.
The company said in a news release they plan to make small improvements to the property and continue leasing it. The property, which includes three buildings, is 81 percent leased.
“The choice to purchase another industrial asset with the 1031 Exchange was obvious with the current market demand and previous experience with this type of space,” the company said. “Allen Sigmon did search for investment properties in Arizona and Texas in addition to New Mexico but saw that cap rates for similar buildings were much lower in different markets as compared to New Mexico. The value, location and value-add opportunity all made sense for the Jefferson Business Center.”
Albuquerque’s industrial real estate market, which includes buildings such as warehouses and manufacturing plants, is as tight as ever. Albuquerque’s industrial vacancy rate is low at 6.2 percent, according to CBRE research.
What’s more, the median asking lease rate for industrial space is $7.27 per square foot, which is higher than the previous post-recession high of $7.25, reached in 2010.
Allen Sigmon owns and manages two other industrial properties, the Venture Commerce Center on the Westside and the High Street Industrial Complex in the north Interstate 25 corridor.