ALBUQUERQUE, N.M. (KRQE) – Since the pandemic hit New Mexico, many industries sent their employees home to work. A lot of those work-from-home setups will likely stick around for the foreseeable future. The changing workforce is impacting industries in New Mexico, and in turn, part of the state’s commercial real estate market.
“I’m getting very good at Zoom,” Anne Apicella laughed, during a zoom interview. By now, Apicella has mastered ‘working-from-home.’ The longtime real-estate broker for Colliers International has worked from her home office in Rio Rancho since before the pandemic. “For many years we’ve heard that working-from-home was a viable option when in fact, the technology didn’t really support it,” said Apicella. “Today, that’s very different.”
Today, home office set-ups like hers are common. So many industries, including KRQE News 13, sent at least part of their staff home to work remotely, to minimize in-person contact during the COVID-19 pandemic.
“Generally, 99.99% we are remote,” explained Demian Rubalcaba, Executive Director for Thrive Counseling Services in Albuquerque. His business and telehealth overall have picked up during the pandemic, with more people seeking counseling. “Sometimes home is safe, and sometimes home is not safe,” said Rubalcaba. “But when it is safe, they’re more comfortable. You know, who’s not comfortable in their pajamas?”
In March 2020, when COVID-19 hit the state, New Mexicans faced stay-at-home orders, an ebb and flow of businesses shutting their doors and reopening. Now the state is coming up on a year in the pandemic, and many employers have another consideration; do they still have a need for office space?
“We definitely let some of our real estate overhead, we just kinda let it go,” said Rubalcaba. He said for now, telehealth is here to stay.
His therapists all work from home on their own set schedules, so he decided against renewing the lease for their Rio Rancho location. It’s a trend Apicella expects to see more often.
“Once the leases are up, or lease terms have expired, I think we’re gonna see a lot more vacancy, unfortunately,” said Apicella. Insurance companies and attorneys’ offices are among industries that can work remotely.
“I’m a mom, I have a preteen and a teenager, and I’m running a law firm with multiple employees, and I’ve got multiple co-counsel across the country,” explained Deena Buchanan, President of the Buchanan Law Firm. “So we had to pivot very quickly and become a virtual law firm.”
With kids doing school at home, and no more work commute, Buchanan acknowledges the perks of her home-office. “I’ve been here to see them at lunchtime and on breaks. It’s a level of contact that I have with my kids during the school day that I’ve never had before, so that has been nice,” she said. “And then I’m also here for dinner.”
Even with the comforts of home a few feet away, like so many employers, Buchanan explained she also sees a need for staff team-building to return, and face-to-face relationships with employees and clients to return. Plus, the pandemic has highlighted broadband inequities. “I represent a lot of people who don’t have access to the same kind of technology that I do.”
“I think we’re seeing a lot of considering and reconsidering,” explained Scott Whitefield, President of Colliers International in Albuquerque. He’s been in real estate for 25 years and expects a drop in the commercial market.
“There are tenants out there that realize they don’t need an office, but I think there are a lot more in the way of tenants that just realize that their office has to change,” said Whitefield. “And what that looks like moving forward, again is one of those things that’s sort of an unanswered question.”
Seeing empty storefronts is nothing new for Terry Cosper, who works in a northwest Albuquerque strip mall as an independent contractor for Farmer’s Branch Insurance. While Cosper’s industry has adapted to doing more business remotely, he said his customers have too, which is another factor that could prompt companies to downsize their need for more office space in the future.
“We’re obviously seeing less traffic, floor traffic,” said Cosper. “We used to see quite a bit more with people making payments and making appointments, and now a lot of it’s done over the phone or online.”
Now as the COVID-19 vaccine makes its way through the state, a lot of workers will start settling back into their offices. However, not everyone will return to a traditional office setting. “I think at this point we’re looking at sort of moving into a hybrid situation over the next several months,” said Buchanan. Even if her firm expands down the line, she said it won’t necessarily mean she’ll need to rent more office space in town, with a mixture of staff continuing work remotely. “A lot of businesses will downsize because so many of their employees can work from home,” said Apicella. “They don’t need that overhead.”
“The short-term seems a little bleak right now, but I honestly know that is the short term,” said Whitefield. “And the long haul, we’ll come out of this thing just fine.”
According to Colliers, the Albuquerque metro area historically has about a 15% vacancy rate for office space. Whitefield said that could jump to close to 18-20% over the next couple of years, which could also decrease some asking rates.