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New owners bringing marquee Downtown office tower back to life

The view from Fifth and Marquette.

January 30, 2025

BY DAVID LEE

Argus Investment Realty bought 500 Marquette in 2021 – in the thick of a pandemic that led plenty of people to wonder if central business district office towers had any future at all.

The 15-story structure was certainly not where the new owners wanted it to be: Less than half the building was leased out when they first considered buying it. And yet, just a few short years later, that occupancy figure is up to 83 percent. Argus President Scott Throckmorton thinks it can get even higher this year.

“We viewed 500 Marquette as a real gem that had not been properly taken care of for a number of years,” he said. “There was no reason that that building should have been only 42 percent occupied in a market where its peer buildings were at 92 percent.”

Or at least no reason that major upgrades and some renewed enthusiasm couldn’t fix. When Throckmorton and his Argus partners bought the building, they plowed millions of dollars into amenities and polish.

At or near the top of the upgrade list was improving building safety, a major concern of prospective tenants. Argus installed security cameras at key points in the building and the attached garage, plus a new card-activated gate for drivers entering the facility. Throckmorton emphasizes those upgrades and the 24/7 security staff when he markets the property.

“You don’t have people wandering around the parking garage looking for opportunities to smash and grab,” Throckmorton said.

The partners also replaced the old hardware in all six elevators, which Throckmorton said had been unreliable, and added a “destination dispatch” arrangement meant to cut travel time. Elevator riders select their destination at a kiosk by flashing their office keycard or entering the floor they want. The system groups passengers heading to the same place and directs them to the same elevator, which takes them to their floor without further button pushing.

Heating and cooling also made the improvement list. Those systems can now be controlled remotely by building staff, who can spot problems before their users call them in. A coffee bar/cafe will open soon, Throckmorton said, and a fitness center/game room is planned.

The upgrades seem to be getting results: 500 Marquette recently signed a lease with one of the city’s largest architecture firms, FBT Architects, which has taken over the top floor. That high perch once housed Albuquerque’s members-only Petroleum Club, the scene of many a business lunch, meeting, and private event until it closed in 2007. In the run-up to FBT’s move-in date around the turn of this year, lights on the fifteenth floor were blazing all night.

“They’ve been working on it around the clock,” Throckmorton said at the time. “It’s going to be a spectacular space.”

Other tenants include Senator Ben Ray Luján, the Miller Stratvert law offices, the State of New Mexico Economic Development Department, and Exus Renewables.

Overall at 500 Marquette, Throckmorton said, “We’re doing quite well, thank you very much.”

But while Argus seems to have latched onto a winning formula, Throckmorton doesn’t think it will work for every office structure in the core. His building is not quite forty years old and is considered “Class A,” the real estate term for cream-of-the-crop structures that command above-average rents. With features like a super-high-ceilinged lobby clad with granite and glass, few older buildings in the core could match it even before its recent upgrades, he said.

Stacking the odds still further against big renovations of older structures is the COVID-accelerated trend toward smaller office footprints. Since many firms need less space, “they look for the best they can afford,” Throckmorton said. From the owner’s perspective, “Spending that kind of money may not translate into more occupancy, with a rental rate high enough to bring in enough income to justify the investment,” he added.

That reality has lately led many observers of American city centers to cast doubt on the idea that offices can be the economic engines (and property tax collection bonanzas) they evolved into during the post-World War II era. The conventional wisdom these days is that more housing, possibly renovated right into those former office towers, will instead bring more life to urban cores (DAN, 10/28/24). Throckmorton, however, is not ready to give up on Downtown offices, at least in Albuquerque.

For one thing, the office market citywide is healthier than it’s been for decades, Throckmorton said, because developers have added little to the supply since the early 1990s even as population growth has increased demand. The Downtown portion of that market, despite its disadvantages, remains ample and conveniently located, he added.

Nevertheless, Throckmorton is not ruling out housing growth in the core’s future. If nothing else, he said, an influx of residents would spur the development of attractions like restaurants that office workers also enjoy.

“The focus on housing and getting residents Downtown is proper, it’s correct,” he said. “The key to making this a really successful office market is going to be those amenities, and those amenities are going to need residences.”

Argus has taken its own tentative steps into the housing market. It owns the southwest corner of Third and Lomas, and has planned to build 150 loft and apartment units there with ground-floor retail (DAN, 9/21/20). Construction drawings are complete, Throckmorton said, and it could apply for permits at any time. High construction costs and interest rates are keeping the project on hold, he said, but he believes it will be built sooner or later.

As a general rule, however, Throckmorton believes that market forces and private financing won’t be enough to put new housing in the core.

“You’re going to see a lot of government incentives that are necessary to get apartments, to get residences built Downtown,” he said.

Downtown Albuquerque News is a digital newspaper serving Downtown, Old Town, and surrounding neighborhoods, published by email on weekdays. Sign up here.