On July 6 Democratic U.S. Senators Martin Heinrich and Ben Ray Luján and President Biden’s senior adviser and infrastructure coordinator Mitch Landrieu along with Mayor Tim Keller held a news news conference to announce $25 million in new federal funding that will be used in part to expand the Uptown Transit Center. The total cost of the entire development project will be at least $50 Million. The federal funding is from the Rebuilding American Infrastructure with Sustainability and Equity program (RAISE) which was expanded under the Bipartisan Infrastructure Law.
The project has been dubbed “Uptown Connect”. It is a public-private partnership project to reconstruct the existing bus platform on America’s Parkway, between Uptown Boulevard NE and Indian School Road NE. The transit station is the end of the line for the Albuquerque Rapid Transit (ART). According to the city, the bus route is one of the most frequent bus services used.
Senator Martin Heinrich for his part had this to say:
“This is an investment in infrastructure that we have not seen in the United States of America since the interstate highway system was created … this is what’s going to make us competitive in this very competitive world for years to come.”
Heinrich also announced Albuquerque will also be getting $18 million from the Infrastructure Act to purchase 20 new electric buses to be added to the city’s bus fleet.
Mayor Tim Keller for his part said the total estimated price tag for the new Uptown Transit Center is about $50 million. Half of that money is from RAISE. Keller says the projects receiving these grants are supposed to be public-private partnerships. The city owns the land and the two private developers on the grant application are Family Housing Development Corp. and Palindrome Communities, the company behind the El Vado Motel redevelopment and other projects around the city.
Mayor Keller said the project is something the city has been pursuing for a while. According to Keller, the facility being built will include transit security and staff 24/7. Keller said this:
“This is about connecting housing to public transit. It’s where you can live and access public transit all over the city. This will be literally the first example of this in New Mexico. … So right now, we do have a lot of challenges with safety because the parking lot that serves as the ART stop is just a parking lot. It’s not secure at all.”
The overall development project will have entertainment, affordable housing and retail uses. Project developer Palindrome said it will be building 400 apartments above the transit center, as well as restaurants and retail sites. Half of the apartments will be dedicated to affordable housing and the other half will be at the fair market rental rates. The existing Nusenda Credit Union south of the bus transfer station will shift locations so that it remains next to the transit station.
As envisioned, the project is designed to make it easier for people to get to Uptown and to live in the area by adding more housing and expanding the Uptown Transit Center. Lawrence Kline, principal project planner for the project said this:
“We work in a half-mile radius. … That’s about the average distance we think people will walk to get transit. So, within a half a mile of here, there are 13,000 jobs and only 100 people who both live and work within Uptown. So that means every day, 13,000 people are coming in from everywhere else. Why not let them live here, work here, ride the bus to UNM or to Presbyterian?”
Construction is expected to begin in April 2025 and may be complete in 2027, according to transit department staff. Carrie Barkhurst, a senior planner with the city’s Transit Department said this:
“Bringing people to the project and bringing retail and commercial is just going to make this area so vibrant and make it the urban center that we always wanted … We can say we want these things, but if the market doesn’t respond, we don’t usually have that much leverage. … In this case, because of the federal grant to buy the property and we said we want to do this joint development, that’s what got us in the door to ask for more federal funds for this project.”
10-STORY “TWO PARK CENTRAL TOWER” UP FOR AUCTION
On July 26, it was reported that Two Park Central Tower, 300 San Mateo NE, is being marketed as a redevelopment project for up to 115 apartment units, according to the listing. Much of the interior of what has historically been an office building has been gutted, said Todd Clarke, the broker on the sale. Standing 10-stories tall and 101,000-square feet, the building is six miles east of Albuquerque’s Downtown and is one of Albuquerque’s tallest buildings outside of Downtown. The building is currently at auction with a starting bid of $600,000. The listing states:
“300 San Mateo Blvd NE offers the rare and profitable redevelopment option for savvy investment, with a major income generating prospective. …This multifaceted, (income-generating) project is in the prime northeast region of the city, currently a strong demand area of the city that needs 16,268 additional multi-family rental units and is experiencing phenomenal rent growth.”
The building is being brought to market by Ten-X. Todd Clarke, a broker said much of the interior of what has historically been an office building has been gutted. Clarke said this:
“I think that’s really its highest and best use. … We’ve got a housing shortage of about 13,000 rental units and we’re seeing rents go through the roof.”
The link to quoted news source material is here:
CITY NEW APARTMENT CONSTRUCTION BOOMING
In the Albuquerque metro area, new permits for apartment building and actual construction has spiked dramatically. Building permits for a total of 4,021 new housing units were issued in the metro area in 2021, 35.1% of which are for units in buildings with five units or more. In Albuquerque, about 2,000 units across 12 properties are under construction, with an additional 2,485 units planned across 16 properties and 5,143 prospective units.
Five years ago only 20.3% of all permits for new housing units were for buildings with at least five units. The 14.8% point change for new apartment construction from 2016 to 2021 ranks as the 10th largest increase among all U.S. metro areas.
Alan LeSeck, Apartment Association of New Mexico executive director, told the Albuquerque Journal the market is “very hot,” due partially to the lack of apartment development dating back to before the pandemic. Since 2013, and prior to 2020, LaSeck said Albuquerque was averaging about 500 new units a year, below what the city needed to accommodate new residents. LaSeck said that, for every 10,000 new residents, there needs to be about 3,400 apartments since about 34% of people typically rent. According to RentCafe, in Albuquerque, the average apartment is rented for $1,170 per month.
According to the February Greater Albuquerque Association of Realtors report, home prices in Albuquerque continue to reach record highs, with the current median home value sitting at $315,000, up by 18.9% compared to a year prior. This has resulted in prospective homeowners being pushed out of the housing market, resulting in a demand for more rental and apartment unit construction. The increase in home prices has meant that some purchasers are simply priced out of the market. There are those who have sold their homes only to be unable to purchase another home due to increasing costs or a lack of availability. These former and would-be home-owners are then pushed into the rental market, increasing the occupancy rate and affecting rents.
Titan Development is among the leaders of multi-family development. Titan is currently working on 3 multi-family developments totaling more than 500 units. It is also working on the largest multi-family development in construction with the 281-unit Allaso High Desert apartments at San Antonio and Tennyson Street. Some of Titan’s new developments, such as the Allaso Vineyards at Holly and Ventura, target an aging demographic that may be looking for a new place to live with less maintenance than a single family home.
Among the larger developments is Overture Andalucia, a new multi-family complex on Albuquerque’s West Side aimed at adults 55 and older. The 171-unit complex, owned by the property investment, development and management company Greystar, was set to have units ready by fall.
Uptown has become one of the economic and entertainment centers of the city. It has grown from 2 modest malls of Coronado and Windrock shopping centers into a financial district with the highest concentration of retail establishments in the state. An abundance of shopping and dining venues characterize the area as nucleus of commerce. In response to people looking for an urban experience without transportation headaches, two major apartment projects are fully underway in the uptown area.
Goodman Realty is moving forward with construction on multi-family housing for the first time since the ’80s. Goodman Realty is planning to build Lofts at Winrock in Albuquerque’s Uptown area. Although referred to as the “Lofts” project, renderings show developers are planning to call the apartment development “The Pine Needle.” Three buildings comprise the entire development, one of which will be used for townhomes. Plans show the apartment complex will have four floors of upscale apartments. At least one of the buildings will have a large courtyard.
The increased demand for apartments has led Goodman Realty to look at other areas to pursue multi-family development, such as near the Journal Center. Scott Goodman said multi-family housing could be particularly attractive to developers since it is seen as a less risky investment and it is also easier to finance. More development, he said, could also lead to lower rental costs and help with the affordability problem. Goodman put it this way:
“We’re looking at doing more apartments. … Apartment rents have really skyrocketed, apartment construction costs have really skyrocketed, and I think that the supply of apartments is really going down, and that’s part of the reason you’re seeing what we’re seeing … and the city needs more apartments. … The more apartments we have, the more supply we have, the more affordable it should be.”
The 243 unit, six story Markana apartment complex is under construction and is scheduled to be completed in 2023. It is located at 6500 Americas Pky, NE, South of Coronado shopping center, West of the Marriott and immediately North of the Hilton Garden Inn and West of the Bucca De Beppo restaurant. It will have studio apartments and 1, 2 and 3 bedroom apartments ranging from 589 square feet to 1,226 square feet.
Construction of the Element by Weston in the uptown area merits mentioning. It is a 120-room, 86,335-square-foot hotel that is currently under construction located at 2430 Louisiana Blvd. NE, directly East of Coronado Shopping Center.
The links to quoted news sources are here:
ABQ UPTOWN APARTMENT COMPLEXES
The uptown area where Uptown Connect will be developed already has a number of apartment complexes.
The Uptown Park apartments, formerly known as the Landmark Apartments, are studio and 1 and two-bedroom apartments located at 6200 Indian School Rd NE that were built around 1965.
The Warren Park Apartments located at 6230 Indian School and directly East of the Uptown Park Apartment were also built around 1965.
Around the year 2000, the 4 story Woodmark Assisted Living complex located at 7201 Prospect Place NE was opened and provides extensive home care facilities.
ABQ Uptown Apartments were built in 2008 and located at 2222 Uptown Loop, NE, North of Indian School and East of Louisiana. It has rental units of studio apartments and 1,2, 3-bedroom apartments ranging from 603-1,671 square feet. The ABQ Uptown Apartment Complex consists of a number of separate 3 story buildings.
COMMENTARY AND ANALYSIS
The Uptown Connect with the development of 400 apartment units in the uptown area is coming at a time when there is a construction boom of apartments in the Uptown area. It will complement the 243 unit, six story Markana apartment complex as well as Goodman Realty construction of the Lofts at Winrock in Albuquerque’s Uptown area which will consist of apartments and upscale condominiums.
Home builders serving the Albuquerque area estimate the cost to build residents in Albuquerque is between $175 to $275 per square foot. In other words, to build a small 1,000 square foot home will cost between $175,000 (1,000 square feet X $175) $275,000 and (1,000 X $275), not including land acquistion, depending on custom design and materials used. It’s a cost that equally applies to apartment complexes. City officials have said it would cost between $20 and $25 million dollars to build a new 100-unit apartment complex which is the reason for the city relying on acquiring existing motels and remodeling them for affordable housing.
Many developers and investors will no doubt believe that dedicating 200 of the 400 apartments of the Uptown Connect project to low-income housing is filled with good intentions but not based in market reality. The blunt truth is that the final cost of building a 400-apartment complex on some of the most expensive commercial property in the city will be upwards of $75 Million if not more in construction costs, even though it is city owned property.
Like it or not the apartment developers and managers are in the business of making money. High end developments such as the Markana developers and the Lofts at Winrock developers will likely frown on the city’s efforts for low-income housing essentially adjacent to their own multimillion projects. Dedicating half of Uptown Connect to low-income housing is not the highest and best use of city resources given the other residential developments in the area. The market forces will likely have a major impact and sooner rather than later developers and investors will want the entire project to consist of fair market housing as profits become a major factor.
The city would be wise to look elsewhere to build low-income housing on city owned property. The Keller Administration should seek with acquisitions of existing vacant commercial property for conversion into low income housing such as the acquisition of the 10-story “Two Park Central Tower.”