Story on strong office space demand

[eomaha]

One California under construction at Commercial Federal Business Park

Office space demand is strong, report says

Despite the addition of 161,000 square feet of new office space, Omaha's suburban market has seen a net gain of nearly 100,000 square feet leased so far this year, Grubb & Ellis/Pacific Realty reports in its latest market trend study.

The new leases kept the vacancy rate about the same as in the second quarter, 15.1 percent, and yielded the biggest net gain in three years.

"That's strong," said Scott Heider, the company's executive vice president. "There's no question it reflects what's going on with the economy. Absorption means there's growth. It means people are expanding - either new businesses coming in or existing businesses expanding."

The downtown office market, as expected, hit 28.7 percent vacancy, up from 25.6 percent in the second quarter and a 16-year high, the report says. That reflects Union Pacific Railroad's consolidation into its new headquarters following a similar consolidation by First National Bank.

The "pain" from those moves was tempered by a 60,000-square-foot lease at 1200 Landmark Center by Pacific Life Insurance Co., Heider said.

Pacific Life is opening a regional office in Omaha as part of an agreement to shift its legal residence to Nebraska to take advantage of the state's favorable insurance tax rates.

The company chose a downtown Omaha location over a suburban one.

"That's quite a statement," Heider said. "That's someone new to the state taking an arm's-length look and concluding we've got a lot of great things going on downtown. Hopefully, there will be more of those."

A total of 240,000 square feet of new office space is expected to be completed this year.

New construction in 2005 is expected to be significantly less than this year, according to the trends survey, as leasing activity is expected to continue to pick up.

That's "a powerful combination that should cause vacancy to finally make a significant downward move in the next 12 months," the report says.


--------------------------------
Market Sq. feet. Vacant

Downtown 3,568,939 28.7%

72nd St. corridor 595,474 12.0%

Miracle Hills 716,692 11.7%

Old Mill 1,132,564 23.2%

Regency 837,414 6.8%

Southwest 1,389,601 18.1%

West Dodge 2,166,969 15.5%

West Maple 864,508 11.9%

Total 11,272,161 19.4%

[OhioStreetKid]

Man, Old Mill has a high vacancy rate. I wonder why?

[almighty_tuna]

Depends on what they consider Old Mill. Gallup is moving their interviewing center shortly to the old Ameritrade building I believe. If I'm not mistaken its north of that general area by a few blocks. While they don't take up too much room in their current building its still more vacancy.

[OhioStreetKid]

I have to think that the overpass is going to have at least some effect. Keep in mind the rate they have now, still includes Westroads Bank's headquarters which I believe will become completely empty once their new building is complete.

[almighty_tuna]

That's the one, Jeff!

[OmahaMan25]

Anyone find out the name of that building directly north of West Dodge? Its the one thats about 3 stories tall and has a parking grage being built (or i think its a parking grage) next to it. Its driving me nuts driving past it every day and not knowing what its going to look like finished!

[eomaha]

It's another Commercial Federal building... not their headquarters (which is apparently still to come) ... but the second of what will eventually be up to four buildings comprising their campus. I have tried to get a rendering out of Holland Basham... the architect... but they've never responded.

Aside from being larger... it's pretty apparent it will be of a design very similar to the existing building...

[DTO Luv]

Depends on what they consider Old Mill. Gallup is moving their interviewing center shortly to the old Ameritrade building I believe. If I'm not mistaken its north of that general area by a few blocks. While they don't take up too much room in their current building its still more vacancy.

Gallup's call center is moving to the new building under contrusction that Jeff eluded to. It will be for the 250 people that are in tha call center. The building we are in now, 10909 Old Mill Rd. takes up 1/4 of the building. The rest of it is a HUD office and another company called Simpek or something. I would like to see all of Gallup DT. I was on the phone with a guy in Cedar Rapids Iowa who asked if we were in the new building. It's to bad we're not.

I know I'm very pro DT so I would like to see the city do something to slow the construction of all the office space out west. If you took all the occupied space in Old Mill alone , about 4 million sq ft., and spread it over DT, that would mean 4 or 5 First National+ size buildings. We wonder why Des Moines and Tulsa have more taller buildings than Omaha. Alot of people here are way to suburban minded.

Centralizing more businesses DT would bring about a quicker change in the residential areas in and around DT. People could move into the areas could turn the 4 bdr. houses that are now apts. into nice livable areas. It would also bring more retail and restaurants into DT. I would hope that someone in a position of power would have as much vision as the people on this forum.

I know the reason why suburban offices are popular so that you dont have to drive so far to work, but if we could force more people into the old neighborhoods around DT and see more northern development in North and far north Omaha like we have along Dodge and other places out west, it would cut down on commute time. It's a much shorter drive from Florence to DT than it is from Gretna or Elkhorn.