Spec Development On Wane in AlbuquerqueAs rents have failed to
keep pace with construction costs, developers are looking for more preleasing to reduce the risk of developing speculative projects:
In recent years, Angelo Brunacini has been the most ambitious developer of industrial warehouse buildings in the city, building more than 1 million square feet over a decade through his Brunacini Development LLC. He has a prime property at Meridian Parkway, but has not been able to build his 45,000-square-foot building because the numbers don't equate to profitability.
"I've owned the land for 10 years, but if you look at the fundamentals, it doesn't make sense to build without a tenant," Brunacini says. "If I build it, the total project costs me $70 per square foot and I need $7.50 a square foot in rent. Today's rents are in the high $6 range and are moving up fast because of a lack of space. In six months, I may be able to do the project if construction costs hold and rents go up."
