Omaha's Razor Thin Industrial Market

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iamjacobm
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Omaha's Razor Thin Industrial Market

Postby iamjacobm » Sun Mar 01, 2015 11:59 pm

It has been like this for a while now, but we are at a new record low vacancy of 3%. We have three submarkets under 2% and the worst one is only at 6%. It really is too bad that the project on Ames fell through not just for North O, but for the city at large. With so little space available I hope we aren't missing out on some potential business. I am surprised we haven't seen some spec industrial space announced or proposed with these kind of numbers.

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Re: Omaha's Razor Thin Industrial Market

Postby Brad » Mon Mar 02, 2015 9:13 am

I went to a seminar a couple weeks ago at the Chamber on Industrial Site Selection. One of the biggest issue companies see with Industrial development around Omaha is the lack of skilled workers to work in new manufacturing facilities.

People also think Omaha would be a "Prime" location for industrial between Chicago and Denver on Interstate 80 and right up the road on 29 from KC. However most companies would rather be in Des Moines, still between Chicago and Denver, but also on 35 Between KC and the Twin Cities. That said, the majority would still rather be closer to Chicago or Denver.

There is some planning for a large industrial park south of town, but right now, there are a few pieces to the puzzle still missing.

Personally I see most of the industrial/manufacturing going east of the river over by Google and Mid American Energy on the south side of the bluffs. Right next to I29 and also a rail line that is not considered a major mainline and the railroad would be way more open using for industrial access.
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Re: Omaha's Razor Thin Industrial Market

Postby iamjacobm » Wed Aug 02, 2017 8:44 am

http://www.omaha.com/money/r-r-commerce-park-to-transform-acres-of-raw-land/article_eb0f43e2-13f6-50fe-af4a-a7bf142496ec.html

The site stands out as well for its span of nearly 80 acres along Highway 50 south of Highway 370. The first 250,000-square-foot warehouse is to be ready for occupancy next summer. When done, three more structures, for a total of about 1 million square feet, are to occupy what once was raw land.


» Since the start of the year, about 305,000 square feet of new industrial and warehouse space has been added to the local inventory. Of that, 91 percent reportedly was occupied at completion.

» Roughly 1 million square feet of new development is underway, almost all of which is to be done before the year’s end and has been claimed by tenants.

» On the rental side, the vacancy rate is a low 3.3 percent. In the first six months of this year, a net 342,000 square feet of industrial and warehouse space was leased.

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Re: Omaha's Razor Thin Industrial Market

Postby Omaha_corn_burner » Wed Aug 02, 2017 10:36 am

What's the difference between commercial and industrial?

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Re: Omaha's Razor Thin Industrial Market

Postby Brad » Wed Aug 02, 2017 10:49 am

Omaha_corn_burner wrote:What's the difference between commercial and industrial?


Commercial is more retail, shopping, office. Industrial is more manufacturing, warehouse, transloading.

Its not a fine line, there is a little grey area where the two meet, a lot of the breweries that have tasting rooms like Luckey Bucket, its in an industrial space, but they have a retail portion.
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Re: Omaha's Razor Thin Industrial Market

Postby Omaha_corn_burner » Wed Aug 02, 2017 10:51 am

Brad wrote:a lot of the breweries that have tasting rooms like Luckey Bucket, its in an industrial space, but they have a retail portion.

This is actually exactly what I was thinking of.

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Re: Omaha's Razor Thin Industrial Market

Postby Omaha_corn_burner » Wed Aug 02, 2017 10:52 am

So how about Oriental Trading down the street? They don't manufacture anything, just ship out goods.
How about the Yahoo/Google/Facebook datacenters? They don't really "do" anything at all.

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Re: Omaha's Razor Thin Industrial Market

Postby Brad » Wed Aug 02, 2017 10:59 am

Omaha_corn_burner wrote:So how about Oriental Trading down the street? They don't manufacture anything, just ship out goods.
How about the Yahoo/Google/Facebook datacenters? They don't really "do" anything at all.


Oriental Trading is a warehouse and zone industrial. The data Centers are zoned "Light Industrial", they are basically a warehouse full of computers.

Check out the Sarpy County GIS Map, there is a zoning layer under basemaps.
https://maps.sarpy.com/html5viewer/inde ... iewer=SIMS
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Re: Omaha's Razor Thin Industrial Market

Postby iamjacobm » Wed Aug 02, 2017 11:02 am

Its not a hard and fast rule. Generally "industrial" will be more open spaces, higher ceilings in less visible locations than "retail."

As was mentioned though many of these have showrooms or office portions in the same building.

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Re: Omaha's Razor Thin Industrial Market

Postby Omaha_corn_burner » Wed Aug 02, 2017 11:20 am

Alright, thanks. I have no idea about this stuff, so here's a question.

Typically do industrial operations build their own buildings or move into existing units? OP is sad about a low vacancy rate, but growth can continue if companies are just building their own buildings. Wouldn't the square footage or revenue be more important than vacancy rate? Not knowing anything, it seems that a 3% vacancy rate is fantastic. Can you imagine if developers just built 100,000+ square foot warehouses and then tried to find tenants?

Again, I have no idea about this topic, I was just confused by the negative replies about the vacancy rate.

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Re: Omaha's Razor Thin Industrial Market

Postby iamjacobm » Wed Aug 02, 2017 11:32 am

In theory you want all available space filled right? Low vacancy mean owners are making money and demand is strong.

Where it can be trouble is if someone wants to expand their operation or someone new wants to move into the market there may not be space available that they need, and not every company wants to wait a year to build a new facility and many companies simply want to lease from other owners as they are not interested in being involved in owning the land/building.

The fact that a number of the new projects going up are spec and not build to suit is very good news to me. Means investors are confident that they can fill the space without having a tenant lined up before they break ground, signs of a strong market.


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