Downtown office vacancy rate

Downtown, Midtown, and all parts east of 72nd.

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eomaha
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Downtown office vacancy rate

Postby eomaha » Sat Jan 08, 2005 4:21 pm

As we could have guessed... thanks in large part to buildings being removed from the market due to the booming condominium conversion market.

Here's the Lund Company's semi-annual office market report...

http://www.lundco.com/pdf/Omaha%20Ofc" onclick="window.open(this.href);return false;%2 ... 202005.pdf

Nothing too exciting construction news wise. The largest proposed remains the 4-story, 105,000 sq foot 'Executive Tower North' to go in Old Mill north of Dodge. Looks like another 4-story building planned for Commercial Federal's business park as well.

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Postby OmahaDevelopmentMan » Sat Jan 08, 2005 5:03 pm

Good to hear. Pacific Life pry helped a little bit too. So I wonder how much the vacancy rate would go down if the old UP HQ came down.

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Postby projectman » Sat Jan 08, 2005 7:23 pm

I fear our downtown construction boom of the last 10 years is history. Besides all the condos it doesn't look that bright(IMO)for new office construction.

Can someone convince a new Fortune 500 company to move their headquarters to Omaha?
Last edited by projectman on Sat Jan 08, 2005 8:10 pm, edited 1 time in total.

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Postby almighty_tuna » Sat Jan 08, 2005 7:48 pm

projectman wrote:I fear our downtown construction boom of the last 10 years is history. Besides all the condos it doesn't look like bright for the new office construction.


Please explain why. Not challenging, just interested in your thoughts.

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Postby projectman » Sat Jan 08, 2005 8:07 pm

Well first the DT vacancy rate is at 23%. The past 10 years has been phenominal for downtown and the riverfront and I don't know that we will see expansion like that again. Unless we see another decade long economic expansion and a change in the Omaha administration to one with vision and not afraid of risk. I don't think Fahey and his groupies would have endorsed the Qwest Center back in 98 and pushed aggressively for development like Hal Daub's people did. These type of risk takers and dreamers come along about every 30 years or so. The last administration with such vision was the Leahy gang back in the 70's. Unfortunately Omaha will be led by the stereotypical conservative, risk phobia, don't want to step on anyones toes, type administrations for the next 2 decades. Maybe I'll be proven wrong in my assessment.

I just don't see another Daub or Leahy in the near future(hope I'm wrong). Maybe there are a few young, up and coming professionals that will have a calling for Omaha leadership.
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Postby eomaha » Sat Jan 08, 2005 9:45 pm

You're complaining of the vacancy rate in one breathe... and praising the downtown office development which was directly responsible for it in the next.

Downtown construction has been as much about Gottschalk and Lauritzen as it has been Daub. And aside from the UP Center and a rather lackluster Gallup building... it isn't as if we have really brought that many new employees downtown anyway.

You're discounting all the new condo development... when in FACT... this is precisely what will invigorate further office development downtown. When it becomes apparent to business managers that downtown is where "it's at" in terms of attractions, entertainment, AND living... you'll see that much more investment in downtown office space.

Relax. These things go in cycles... be glad we're in a strong yresidential cycle.

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Postby OmahaDevelopmentMan » Sat Jan 08, 2005 10:05 pm

Guys I just thought of an idea to lower the vacancy rate. Tear down the "modern" portion of the old UPHQ and turn the new part into condos. I mean most of the reason for the high rate is b/c the UPHQ is getting less and less employees that work there every day(if the move is still in progress). That would pry lower the vacancy rate at least 5-8%. But that pry won't happen. Oh well. What are the odds of a new F500 company movin to the Big O?

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Postby guy4omaha » Sat Jan 08, 2005 10:10 pm

Well said Mr. Huston and a very good reminder indeed. Thanks.

Makes perfect sense that once we get rid of the Ghost Town look and replace it with a thriving urban center corporate big whigs will be more receptive to creating office space in a place where it will be easier to recruit top talent to locate.
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Postby eomaha » Sat Jan 08, 2005 10:16 pm

Here's the building we need to get off the market... I believe it is completely empty right now. It can be yours for just $12 million. :P

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Postby DTO Luv » Sat Jan 08, 2005 10:18 pm

We can always blow up Central Park Plaza :D ...can't we? :?
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Postby OmahaDevelopmentMan » Sat Jan 08, 2005 10:22 pm

Wow more of a reason to dislike that building. I have always hated that building. I mean it has that stupid looking panneling and it is about 5 blocks too far away from where it needs to be. how many sqft is that?

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Postby eomaha » Sun Jan 09, 2005 12:00 am

I guess I'm one of a few people who actually like that building.

It's listed as 224,000 sq ft.

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Postby Ingersoll1978 » Sun Jan 09, 2005 12:08 am

I've always liked that one too Jeff. Maybe it should go condo! :)

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Postby eomaha » Sun Jan 09, 2005 12:18 am

I'll tell you what... that isn't a terribly bad idea. It's actually a great location for residential... with Joslyn and Central High School immediately across Dodge Street. There is a big surface lot to the southeast which could be turned into greenspace. The Rose Theatre is to the southeast of that.

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Postby Ingersoll1978 » Sun Jan 09, 2005 2:03 am

Also, the views would be great as well. To the east is Downtown, the west would be Midtown, and the North would be Creighton.

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Postby projectman » Sun Jan 09, 2005 9:56 am

I wasn't complaining about the 23% just stating a fact why we won't see any major office development soon. If all the office space that is empty is converted to condos maybe but that is a long shot. I believe I did mention the condo development as the only bright spot. I just don't think the high rise office construction we just had isn't going to happen for a while.
Last edited by projectman on Sun Jan 09, 2005 10:12 am, edited 1 time in total.

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Postby eomaha » Sun Jan 09, 2005 10:12 am

Yes, and I would simply refer to this bright spot as a MAJOR and driving one... rather than the 'only' one.

I guess that's my half full cup flowing over again. :)

Outside of Chicago and perhaps Minneapolis... there aren't really any midwestern cities which see a continuous cycle of new office construction. We have to be patient, it will come again. The residential boom will indeed be a catalyst.

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Postby OmahaRules » Sun Jan 09, 2005 12:31 pm

What are the odds of a new F500 company movin to the Big O?


Since nearly 80% of all new jobs are created not by the large F500 companies but by smaller newer companies we should be focusing on our cities entrepreneurial ability. We are ranked high in the "cost of doing business" category so let's promote that. We need innovation to occur in Omaha because innovation is the key to growth. I think and I hope many of you agree we should focus more on Omaha's small businesses and less on the "long shot" of a F500 company relocating. But we can really do well if we try to lure a F500 company and support and actively recruit newer smaller more innovative businesses to Omaha.

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Postby eomaha » Sun Jan 09, 2005 12:44 pm

That said... there are many medium sized companies in Omaha which are having great success and poised to become the next generation of Fortune 50 0 companies in the years ahead.

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Postby futrecndvlpr » Sun Jan 09, 2005 1:49 pm

Is the old UP building counted in the vacancy rate? I am pretty sure that it is not counted. Isn't the rate based on current space that is up for lease?

Turning the Brandeis into condos will take a nice chunk out of the vacant space, now if Central Park could just fill up some of their space.

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Postby DTO Luv » Sun Jan 09, 2005 3:35 pm

If they redid the outside of the building on 24th and Dodge it wouldn't be that bad. It's a nice building, but it is ugly as sin. I was in there once for some ethnic festival day they had and my brother played in the "mariachi" band. It was pretty nice on the inside. A condo conversion could be a distant possibility.

Again I would like to reasert my belief that I think Central Park Plaza should go. They are alright buildings, but 16th St. is becoming more residential and they occupy a big portion of the street. The area would be better served by a 24 hour living environment instead of the vancant and potentially 9-5 type crowd. Less office space and more DT residential, think about it. :)
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Postby iamjacobm » Wed Mar 21, 2012 1:04 am

Anyone up for a 7 year thread revival?

http://www.investorsomaha.com/download/office_report_winter_2012.pdf

Downtown's vacancy rate is lower than the city as a whole, which is always great news.  Sitting at 12.2% as of the report.

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Postby Louie » Mon Mar 26, 2012 6:15 pm

Wow. About half of the old vacancy rate in 7 years. Good progress.

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Postby thenewguy » Mon Mar 26, 2012 6:44 pm

Is there a magic number they need to hit to consider additional office towers?  I thought it was discussed once but I can't seem to find it.
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Postby iamjacobm » Mon Mar 26, 2012 6:50 pm

thenewguy wrote:Is there a magic number they need to hit to consider additional office towers?  I thought it was discussed once but I can't seem to find it.


This is purely a guess, but I would think anything under 10% would catch the eye of a developer for some spec office space.

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Postby iamjacobm » Wed Oct 10, 2012 8:15 pm

http://www.rejournals.com/2012/10/10/omaha-office-market-a-beacon-of-stability/

“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.

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Postby S33 » Thu Oct 11, 2012 7:36 am

13.6% really surprises me considering the economy.

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Postby iamjacobm » Sat Jul 13, 2013 8:01 pm

http://www.rejournals.com/2013/07/03/cassidy-turley-office-report-good-news-for-several-midwest-markets/

The Chicago and Omaha markets were both cited by Cassidy Turley as being among those markets seeing the most net absorption of office space during the second quarter. Chicago absorbed 780,000 square feet of office space during the quarter, while Omaha absorbed 703,000 square feet.


One quarter is a really small sample size, but that is some impressive stuff.

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Postby guitarguy » Sat Jul 13, 2013 10:46 pm

Well would you look at that.. This is exactly the kind of data that us tower nerds have been waiting for. Hopefully it begins to make a case for large scale increase in commercial space downtown! *ahem* New Tower *ahem*

Edit: Can you believe Omaha is almost keeping pace with Chicago? That is amazing no matter how you spin it..

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Postby Garrett » Sun Jul 14, 2013 12:27 am

What's even more surprising is that Omaha accounted for approximately 5% of the absorption in the country.

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Postby skinzfan23 » Sun Jul 14, 2013 1:27 am

This story from the World Herald furthers the talk about businesses expanding downtown in Omaha.
Two Omaha firms — COR Clearing and a division of Berkshire Hathaway Homestate Cos. — are moving employees downtown, filling up chunks of vacant office space in the city's core.

The two leases, which total about 50,000 square feet, should further boost the occupancy rate in the downtown office market, which nudged up to nearly 90 percent this past quarter.
Raynor said a client is on the lookout for up to 100,000 square feet upon which to build and is focusing on downtown. His Investors Realty team, he said, is tracking 30 potential tenants searching for a total of up to 850,000 square feet in Omaha.
COR Clearing, a securities clearing firm, plans to relocate 104 employees by fall from its west Omaha home to a 20,000-square-foot area of the 1200 Landmark Center at 13th and Farnam Streets.


http://www.omaha.com/article/20130714/MONEY/707149907/1707#2-office-moves-latest-in-downtown-omaha-s-awakening

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Postby Garrett » Sun Jul 14, 2013 9:28 am

Assuming my calculations are correct, FNBT is about 160,000 square feet. That could be a fairly decent building.

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Postby ShawJ » Sun Jul 14, 2013 11:02 am

Axel wrote:Assuming my calculations are correct, FNBT is about 160,000 square feet. That could be a fairly decent building.


The new Gavilon building is 131,225 square feet.

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Postby EastCB » Sun Jul 14, 2013 11:14 am

FNBT is listed at 220,000 sq. ft.

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Postby MadMartin8 » Sun Jul 14, 2013 11:27 am

What is the Union Pacific square footage? 180,000? 200,000?
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Postby guitarguy » Sun Jul 14, 2013 11:32 am

I could be totally wrong but I remember it as being the first 1000000 square foot building in Nebraska.. But I could be way off haha

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Postby ShawJ » Sun Jul 14, 2013 11:42 am

guitarguy wrote:I could be totally wrong but I remember it as being the first 1000000 square foot building in Nebraska.. But I could be way off haha


This says 1.3 million.

http://www.hines.com/property/detail.aspx?id=354

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Postby MadMartin8 » Sun Jul 14, 2013 11:44 am

guitarguy wrote:I could be totally wrong but I remember it as being the first 1000000 square foot building in Nebraska.. But I could be way off haha



Wow, you're right.


I didn't even come close to comprehending how big that building is.


Edit:

I'm also seeing that FNBT is over a million as well.
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Postby Garrett » Sun Jul 14, 2013 11:52 am

Ahh I see what I did now. Anyway, Leo A. Daly lists it at 1,000,000.

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Postby iamjacobm » Sun Jul 14, 2013 4:36 pm

I am not sure is would make a ton of sense to build new for yourself at 100K downtown with land costs/design standards.  If they went Gavilon it would barely be two floors, if they went to a smaller footprint the cost would go up quite a bit.

100K would be a great anchor for a new building.  Something like 222 South Main in SLC would be awesome.  22 floors, 318 feet, 450K sq foot, over 800 parking stalls and retail space.

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