ALBUQUERQUE, NM-Despite the strengthening national economy, the retail property sector here continues to struggle, according to Ken Schaefer, director of brokerage services for Grubb & Ellis|New Mexico.

“At the beginning of the year, our retail market was doing really well – we were backfilling space and the vacancy rate was dropping,” Schaefer recalls. “But, we’ve seen several big box tenants choose not to renew, as well as increased vacancies from national retailers going bankrupt. As a result, the vacancy rate is going to increase 60 to 70 basis points for the second quarter.”

At the end of the first quarter, the retail vacancy rate was 9.4%, according to Grubb & Ellis. Absorption during the quarter was just 3,104 square feet.