ALBUQUERQUE, N.M. — Las Estancias, the massive mixed-used commercial development in the South Valley, is expecting to welcome more newcomers this year.
Once considered an underserved trade area in need of retail, medical, entertainment, banks and other business services, Las Estancias so far has generated 150,000 square feet of new construction at the site near Rio Bravo and Coors SW. There are currently 14 retailers providing more than 300 jobs, according to the office of County Commissioner Steven Michael Quezada. And more jobs are on the horizon with other tenants in various stages of development.
Randall Parish, a broker with NAI Maestas & Ward who represents Las Estancias, told the Journal that a name brand anchor has signed a letter of intent for at least an additional 20,000 square feet of space.
Shopping center representatives also are negotiating leases with three national chains, and have already inked deals with regional names like Dion’s Pizza, Sushi King, New Mexico Bank & Trust, Nusenda, and Lovelace and Presbyterian health systems, which have either opened for business or will very soon.
Las Estancias could have as much as 550,000 square feet of retail and dozens of businesses at full build-out on the 80-acre site. Parish estimated it would be complete in two to three years.
Target area for development
The shopping center sits in a trade area with 140,000 people living within a five-mile radius. But compared to extremely active trade areas like Uptown and Cottonwood, there is a dearth of retail in the South Valley submarket – an area that stretches east to Interstate 25 and is bounded on the north by Bridge east of the river and by Central west of the river. That area today has 9 square feet of retail space per person compared to the city average of 45 square feet per person.
The upshot: Many South Valley residents have been driving miles to get to some of their favorite eateries and retailers.
“Just the fact that there is a movie theater is amazing. It’s a bummer to leave the area,” Quezada said. “And Starbucks, they said they would never open in the South Valley. It’s just a sign that things are changing here.”
Starbucks opened at the shopping center earlier this year; Carmike Cinemas opened a movie theater there in 2015.
Quezada, a lifelong resident of the South Valley, is excited about what Las Estancias means for his community.
“You know (South Valley residents) actually do eat. You know? We do buy clothes,” says Quezada. “We deserve the same services that other areas of town get.”
According to a trade area analysis, homeownership within three miles of Las Estancias is 13.5 percent higher than the national average, creating more expendable income for DIYers looking to do home fix-up projects or keeping their cars on the road longer.
The South Valley “is one of our client’s target areas” for retail expansion, said Jeff Martinez, a broker with the Allen Sigmon Real Estate Group, who represents NAPA Auto Parts.
NAPA is eyeing retail centers like Las Estancias, among others on the West Side, Martinez said.
Steadily adding tenants
A Walmart Supercenter adjacent to Las Estancias was the first big-box pioneer to open up in the South Valley, lighting the fuse for more commercial activity when it opened a decade ago, Parish said. Its arrival caught the eyes of Albuquerque developers Steve Maestas and Mike Mechenbier, the investors behind Las Estancias.
But by the time Las Estancias was approved for development in 2008, the recession had begun and some retailers that had signed on quickly called off plans. One was Mervyn’s, which has since gone out of business.
It took until 2013 for Las Estancias to finally broke ground, and it has been steadily adding tenants, such as Carmike Cinemas, the first such movie theater in the South Valley in many years and the second IMAX theater in Albuquerque.
Some of the restaurants that have since opened are hoping to catch moviegoers wanting to grab a bite to eat before or after the shows at the 12-screen cinema, said Parish.
The Walmart near Las Estancias has 10,000-plus shoppers each week, generating nearly $90 million in annual sales, according to Parish. Noncompeting businesses, such as speciality retailers, are eager for spillover from that, said Parish. Once a specific category of retailer comes to an area – a cellphone provider, for instance – others are sure to follow. “The dominoes start to fall,” with competitors vying for business space and a piece of the retail action, Parish said.
Local retailers and restaurants, he said, are also a large part of the overall plan for Las Estancias.
“The area has really grown over the last 10 years,” Dion’s CEO Mark Herman told the Journal. “And the community around the store has been very supportive.”
He said sales at the Las Estancias location are better than expected.
Another plan for sustained success at Las Estancias is adapting to the changing retail landscape. That means offering a more experiential location rather than a center purely designed for retail.
The IMAX theater is part of that. Another is a large community space in the middle of the development that Parish said could be used for community events ranging from car shows to flea markets and “anything that the community wants.”
He said there will most likely also be space for “micro-retailers” – small local businesses that might not have the capital to rent one of the suites. “If you are a small chocolatier in the South Valley, or you make homemade breads, or you are a local folk artist, these are spaces that are affordable,” Parish said.
The rent for these boxes will be in the hundreds rather than the thousands.
“You can be in the middle of a major retail area. You can be at a hub with large national retailers. So far as I know, this will be the only shopping center in Albuquerque that offers that,” he said.
Much-needed health care
Health care tenants have also been lining up.
Lovelace Medical Group said it recently opened in the center as part of an effort to beef up access to primary care providers in the South Valley.
“We are thrilled,” site manager Jackie Sanchez said about the new clinic. “This has been a long time coming, and we’re so happy to finally have it open and meet the needs of the community.
Lovelace is leasing 9,000 square feet of space in a 16,000-square-foot freestanding building built by Wilger Construction that also includes a newly opened physical therapy clinic.
Donald Sanchez, owner of Paradigm Physical Therapy, is enthusiastic about business prospects at Las Estancias. Paradigm soon will take over a 4,500-square-foot space next to the Lovelace clinic, its fourth location in central New Mexico.
Presbyterian’s clinic on Isleta Boulevard has outgrown its current location and will move to 3630 Las Estancias to better meet the needs of existing patients and future ones, said Dr. Angela Gallegos-Macias, medical director of Presbyterian Medical Group on Isleta. Construction on the new clinic could begin this summer, she said, with opening by fall 2018.
The health care tenant mix also includes The Rio at Las Estancias, a 65,000-square-foot long-term care and rehabilitation center, which opened in 2014.
And Parish expects interest from dental clinics, chiropractors and opticians.
By: Steve Sinovic and Taylor Hood, Staff Writers - Albuquerque Journal