"Because Albuquerque's real estate investments can provide significantly better returns, a number of out-of-state and local investors have been drawn to the marketplace," Grubb & Ellis explains. For example, USB Realty Investors LLC, paid $13 million for the City Place office building in 2001 and Citicorp paid $24 million for the Montgomery Plaza.

"With an active investment marketplace, there is a high demand for triple net leased properties with credit tenants, regardless of specialty type or price range," the report notes. "In 2002, Albuquerque capitalization rates will range from 10% to 10.5% on class A office properties, 10% to 11% on class B office properties and 10% to 12% on industrial and retail properties."

Still, Albuquerque faces one hurdle–consumer confidence. "The short-term challenge for 2002 is to regain consumer confidence given the recent domestic adversities and the condition of the economy," the report notes. "Great opportunities exist in real estate for investors. Investment capital is currently available at lower costs than in recent years, which allows buyers to leverage into properties they may not have otherwise been able to consider.