Netflix's ABQ deal could mean a boom for local commercial real estate
By Ron Davis – Reporter, Albuquerque Business First November 1st, 2018
While the ink is still drying, some Albuquerque developers are smitten by the possibilities Netflix could bring to the Duke City.
Mayor Tim Keller signed a bill Wednesday, approving incentives and officially bringing Netflix to Albuquerque. At the announcement party last month, Keller compared the streaming giant’s impending arrival to Intel coming to Rio Rancho in the 1980s.
Both commercial real estate experts and local leaders say Netflix’s $1 billion investment over the next 10 years will go beyond the money invested.
Marcus Moufarrige, COO of Australia-based Servcorp, a company that sells office space and IT services across 53 cities in 22 countries, and a member of the Forbes Real Estate Council, said the billion dollars Netflix plans to invest will move the needle, but added that the “why” might be just as big of a factor.
“A billion dollars goes a very long way,” he said. “It’s not about the one-off, it’s the ongoing commitment to get that $1 billion return.”
The state committed up to $10 million in Local Economic Development Act funding, and the Albuquerque City Council approved $4.5 million in a separate LEDA package. LEDA is a financial incentive used by the state and local governments as a closing fund to recruit new businesses and grow existing businesses in New Mexico.
While Netflix finalizes its purchase of Albuquerque Studios and begins to spend that money and produce shows, Moufarriage anticipates ancillary benefits, such as coffee houses, restaurants and more co-working spaces in and around Mesa del Sol, where ABQ Studios is located, that local developers could capitalize on.
Brad Allen, principal at Allen Sigmon Real Estate Group in Albuquerque, said he could see more development around that area.
“When [you’ve] got a bunch of people working out there, they probably would like to just live there so they won’t have to drive as far,” Allen said. “I think there will be a demand. Whatever the average pay is, they’ll build a product around it, whether that’s for rent or for sale.”
Drew Dolan, president of Titan Development, which manages I-25 Studios, said it’s too soon to see any immediate effect to his company, but added that Netflix brings stability and a consistent presence to filmmaking, which can be a volatile industry. With at least 1,000 jobs being filled each year at ABQ Studios, film production should have a buffer against downturns for the foreseeable future.
“There’s just no way Mesa del Sol won’t benefit long-term from [Netflix] being out there,” he said.
Each said Netflix’s presence indicates that New Mexico is business friendly, which could open doors for other companies who weren’t previously considering the Land of Enchantment.
“We’re relatively affordable for the movie folks,” Allen said. “When make an investment like that, you’re not just buying [ABQ Studios.] You’re buying the whole community, you’re buying the whole state because it’s a relatively good place to do business at an affordable price.”
Story originally reported on ABQ Biz First: https://www.bizjournals.com/albuquerque/news/2018/11/01/netflix-s-abq-deal-could-mean-a-boom-for-local.html
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