1031 Exchange in Albuquerque MSA
The Albuquerque MSA offers diverse 1031 exchange opportunities with cap rates around 4.9-6.3%, property taxes at 0.99%, strong technology and federal employment, and median home prices of $350,000 in New Mexico's largest metropolitan area.
Population
955,000
Key Industries
Technology & Research, Federal Government, Healthcare
Table of Contents
Information is for educational purposes only. Consult qualified professionals for specific advice.
Local Tax Considerations
Property taxes, transfer taxes, and local incentives
Property Tax Rates
Average Rate
0.99%
Assessment Method
Assessed Value (New Mexico Property Tax System)
MSA rate (0.99%) vs State average (0.87%)
+14% above state average, -3% below national average
Transfer Taxes & Fees
Transfer Tax Rate
No state transfer tax
Recording fees and document recording tax apply
Local Tax Incentives
Opportunity Zone Investment
Tax deferral and potential exclusion for investments in designated opportunity zones
Eligibility: Properties located in designated New Mexico Opportunity Zones
LEDA Tax Incentives
Local Economic Development Act benefits for qualifying business investments
Eligibility: Job-creating businesses meeting wage and benefit requirements
High-Wage Jobs Tax Credit
Tax credits for businesses creating high-paying jobs
Eligibility: Jobs paying above county average wage
Opportunity Zones
Number of Zones
8
Key Locations
- Downtown Albuquerque
- International District
- South Valley
Opportunity Zones offer significant tax benefits for long-term investments, including deferral and potential elimination of capital gains taxes.
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Market Profile Dashboard
Economic indicators and market trends
Population
955,000
Growth: +1.2% annually
Median Income
$65,604
Unemployment
4.8%
Job Growth
+2.1% annually
Economic Drivers
Market Trends
Median Home Price
$350,000
Average Rent
$1,650/mo
Cap Rates
4.9-6.3%
Demographics
Median Age
38.2 years
Bachelor's Degree+
35.8%
Owner Occupied
67.1%
Property Type Analysis
Investment opportunities by asset class
Single-Family Rental
Primary investment opportunity with stable demand from tech workers, military personnel, and university affiliates.
Market Metrics
- Cap Rates: 5.8%
- Vacancy Trends: Low vacancy around 5-7% due to diverse employment base and population growth
- Demand Forecast: Steady demand supported by technology sector growth and federal employment stability
Risk Factors
- High outbound migration (51% looking to leave)
- Water scarcity and drought concerns
- Property taxes above national average
- Car-dependent lifestyle limiting tenant pool
Opportunities
- Technology and research employment growth
- Federal government employment stability
- University of New Mexico student housing demand
- Film industry growth creating temporary housing needs
Multifamily
Strong opportunities with diverse tenant base from young professionals, students, and military personnel.
Market Metrics
- Cap Rates: 4.9-5.4%
- Vacancy Trends: Moderate vacancy around 6-8% with seasonal variations from university enrollment
- Demand Forecast: Continued demand from population growth and employment diversification
Risk Factors
- Competition from new construction
- Rent control discussions in city council
- High property taxes affecting cash flow
- Economic dependence on government sector
Opportunities
- University of New Mexico student housing
- Young professional market growth
- Military housing allowance support
- Opportunity zone benefits in select areas
Industrial
Excellent opportunities supported by technology research, defense contractors, and logistics sectors.
Market Metrics
- Cap Rates: 6.8%
- Vacancy Trends: Low industrial vacancy around 4-6% due to technology and defense demand
- Demand Forecast: Strong demand from technology expansion and defense contracting growth
Risk Factors
- Dependence on federal government contracts
- Water availability for industrial use
- Environmental regulations
- Competition from other Southwest markets
Opportunities
- Sandia National Laboratories expansion
- Technology company relocations
- Defense contractor facilities
- Logistics and distribution for Southwest region
Office
Mixed opportunities with government and technology demand offset by remote work trends.
Market Metrics
- Cap Rates: 6.5%
- Vacancy Trends: Moderate vacancy around 12-15% due to remote work and government space consolidation
- Demand Forecast: Stable demand from government tenants, uncertain for private sector
Risk Factors
- Remote work reducing office demand
- Government space consolidation
- Competition from newer suburban office parks
- Downtown parking and accessibility challenges
Opportunities
- Government tenant stability
- Technology company growth
- Medical office demand near hospitals
- Opportunity zone benefits for downtown properties
Neighborhood Spotlights
Up-and-coming areas and investment hotspots
Downtown Albuquerque
Urban core with government offices, entertainment district, and ongoing revitalization efforts
Investment Thesis
Strong rental demand from young professionals and government workers, opportunity zone benefits, and urban lifestyle appeal, though higher crime concerns and ongoing development.
Median Price
$285,000
Price Growth
+2.1% YoY
Rental Yield
7.2%
Days on Market
25 days
Key Highlights
Development Pipeline
Mixed-use developments, loft conversions, and transit-oriented development along Central Avenue
Northeast Heights/Foothills
Upscale residential area with mountain views and proximity to Sandia Peak
Investment Thesis
High-end rental market with stable demand from tech professionals and executives, premium pricing power, though higher entry costs and limited rental inventory.
Median Price
$485,000
Price Growth
+1.2% YoY
Rental Yield
4.8%
Days on Market
22 days
Key Highlights
Development Pipeline
Custom homes, luxury condos, and mountain view properties
Westside/Rio Rancho
Rapidly growing suburban area across the Rio Grande with new development
Investment Thesis
Strong family rental demand, newer housing stock, and growth potential, though longer commutes and developing infrastructure.
Median Price
$320,000
Price Growth
+3.8% YoY
Rental Yield
6.1%
Days on Market
28 days
Key Highlights
Development Pipeline
Master-planned communities, shopping centers, and infrastructure improvements
International District
Diverse area along Central Avenue with affordable housing and redevelopment potential
Investment Thesis
Value-add opportunities with opportunity zone benefits and transit access, though higher vacancy risk and neighborhood transition challenges.
Median Price
$195,000
Price Growth
+4.2% YoY
Rental Yield
8.5%
Days on Market
35 days
Key Highlights
Development Pipeline
Transit-oriented development, affordable housing projects, and commercial revitalization
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Compare Markets
See how this MSA stacks up against others
Compare Markets
| Metric | Albuquerque (Current) | Santa Fe | Las Cruces | El Paso |
|---|---|---|---|---|
| Population | 4.0M | 4.0M | 4.0M | 4.0M |
| Median Property Price | $750K | $750K | $750K | $750K |
| Average Cap Rate | 5.2% | 5.2% | 5.2% | 5.2% |
| Job Growth Rate | 2.1% | 2.1% | 2.1% | 2.1% |
| Rental Yield | 4.8% | 4.8% | 4.8% | 4.8% |
| Days on Market | 25 | 25 | 25 | 25 |
Frequently Asked Questions
Common questions about Albuquerque 1031 exchanges
Albuquerque offers diverse cap rates of 4.9-6.3%, stable employment from technology and federal government sectors, opportunity zone benefits, and home prices 21% below national average. The market provides stability with growth potential in the Southwest.
Sandia National Laboratories, Intel, Facebook, and Netflix provide high-paying employment that supports the housing market. The technology sector creates consistent rental demand and economic diversification, though it also creates some dependence on federal research funding.
Yes, the region has 8 designated Opportunity Zones including downtown Albuquerque, International District, and South Valley. New Mexico has 63 total opportunity zones, offering potential tax benefits for qualifying investments.
Property taxes are moderate at 0.99%, slightly below the national average of 1.02% but above the state average of 0.87%. Bernalillo County has the second-highest property tax rate in New Mexico, but rates remain competitive regionally.
Albuquerque experiences high outbound migration with 51% of buyers looking to leave, primarily to Minneapolis, Des Moines, and El Paso. However, the market attracts inbound migration from Los Angeles, Seattle, and Dallas, creating turnover opportunities for rental properties.