Omaha 3Q2017 Market Report
The local office market has made good progress in 2017 despite rental rates dropping just a little bit. Overall vacancy is down from 11.3 percent at the end of 2016 to just 10.6 percent now despite a fair amount of new construction. Since the beginning of this year, the office market has enjoyed net absorption of 225,000 sq. ft. Several new suburban construction projects are underway which will add space to west Omaha: another Sterling Ridge office building (60,000 sq. ft. near 132nd & Pacific); West Dodge Hills Building I (116,000 sq. ft. southwest of 180th & West Dodge Road); and a new headquarters for Core Bank (60,000 sq. ft. in Village Pointe West).
Is retail making a comeback? Vacancy was down and net absorption was up significantly. After the first half of 2017, absorption was -50,871 sq. ft., but after a strong third quarter, YTD absorption now stands at +164,570 sq. ft. As a result, average rental rates have shot up from $12.41 psf last quarter to $13.30 psf now.
While not quite as ridiculous as it has been, the industrial market is still very tight. Only 3.6 percent of space is vacant. YTD net absorption of industrial space is +626,863 sq. ft. The 247,000 sq. ft. Oxbow Animal Health facility has been completed as has a 160,000 sq. ft. distribution building for Blue Buffalo Pet Food and a 159,000 sq. ft. building for Omaha Truck Center.