Just ask the city’s brokers who specialize in this segment.
“We have had three straight positive quarters of absorption in the office sector here,” said Steve Sheppard, vice president and office specialist with Omaha’s CBRE|MEGA. “For our market that is a great sign. It’s a testament to the overall health of Omaha’s commercial real estate market.”
The office market is a good one to consider when analyzing the overall health of Omaha when compared to the rest of the nation. According to the second quarter office report by Colliers International, since the first quarter of 2012, the Omaha office market has seen about 500,000 square feet of positive absorption.
This absorption took place even though more than 900,000 square feet of formerly owner-occupied office space hit the market during this same time.
In the second quarter of this year, Omaha’s office vacancy rate dropped to 13.6 percent, down from a vacancy rate of 14.2 percent in the first quarter, according to Colliers.
Some of the office activity of note in the city includes the 105,000-square-foot WestPlex IV, the only new multi-tenant office building now under construction in Omaha. A new 208,000-square-foot office for CSG Systems wrapped up construction this summer in the city. CSG, though, left behind 200,000 square feet with its move.
Millard Refrigeration is also making a move, building a new 87,000-square-foot headquarters at the site of Omaha’s former Ironwood Country Club. And, of course, TD Ameritrade’s new headquarters building in the Old Mill section of the city will be ready for occupancy in early 2013.
Barry Zoob, senior vice president with Colliers in Omaha, said that the office numbers confirm what he already knows: The office sector here is improving. But it’s a slow recovery that still faces plenty of hurdles.
“Omaha as a community never really feels the major shifts in the economy, whether they be positive or negative, as strongly as some of the other markets,” Zoob said. “We are kind of buffered because of the fact that we are largely a service market. That being said, Omaha did lose jobs during the recession. We’ve recovered about 85 percent of the jobs we’ve lost to date. As a result of that, the office market did take an initial dive.”
Zoob, though, said that this recovery in office lacks depth, meaning that it is too relient on larger transactions.
“It has not been the mid-size companies that have taken part in this recovery,” Zoob said.
What has to happen for the mid-size and smaller companies to become more active? Less uncertainty across the country and the globe will help, Zoob said.
– Dan Rafter