Downtown office vacancy rate

[iamjacobm]

Q2 update from Colliers reports DTO is now at 5.3% vacancy with a YTD absorption of 161,190 SF. The entire remaining Omaha market has absorbed 65,527 in the first 2 quarters.

I am curious what boundaries Colliers is using for their submarkets b/c DTO has 2 million more SF in this report from last one and Midtown has about 2.4 million more. Across the board submarkets made huge jumps that certainly aren't new construction related. Southwest added 2 million SF, West Dodge added nearly a million, Old Mill has over a million more. If some cannibalized others that might make sense, but that doesn't seem to be the case.

https://www2.colliers.com/en/research/o ... ket-Report

EDIT: The 2018 Q2 report has over 10 million more total SF than 2017 Q4 report, but the vacant SF stayed virtually the same. Same company prepared both so either a mistake was made or there has been a lot of inventory not being counted previously that is included in the calculations now.

[iamjacobm]

From the Q3 report.

https://www2.colliers.com/en/Research/O ... ket-Report

The overall Omaha office market experienced negative absorption for the first time since the fourth quarter of 2017. While the Downtown submarket experienced over 37,000 square feet of positive absorption, this was countered by negative absorption of over 49,000 square feet in the suburban areas of Omaha. Year-to-date, absorption for the market is 296,296 square feet, which is above the ten-year annual average of approximately 250,000 square feet.

The Downtown submarket boasts a low vacancy rate of 4.4 percent, 320 basis points lower than the 7.6 percent vacancy rate as a whole and 410 basis points lower than the 8.5 percent vacancy rate in the suburban areas. Approximately 20,000 square feet was absorbed at Central Park Plaza by tenants such as Toast Inc., HDR and ProKarma. Toast Inc., headquartered in Boston, is a cloud-based restaurant software company who recently expanded in to the Omaha market. HDR, an engineering firm headquartered in Omaha, is expanding their presence and ProKarma is an IT solutions company also headquartered in Omaha. Additionally, Mutual of Omaha Bank moved in to over 27,000 square feet of office space in 1200 Landmark Center.

In addition to leases in existing space, there are exciting new projects on the horizon. Currently under construction is a 72,000-square-foot, three-story office building in the Capitol District. The property is 40 percent preleased and is expected to be completed next year. Most recently announced is a $300 million mixed-use project titled Millwork Commons, it’s a sixblock area bounded by 11th to 13th Streets and Izard to Seward Streets in the north downtown area. Situated within Millwork Commons is the former Ashton Warehouse at 12th and Nicholas Streets, it will be converted to office/tech space with tenants scheduled to occupy by 2020. Flywheel, an Omaha-based tech company, announced that they will occupy one and a half floors
of the Ashton Warehouse building. Flywheel's move to Millwork Commons will bring all of their 200 employees, currently in three downtown buildings, under one roof.

[daveoma]

Interesting that not long ago suburban Omaha had a lower vacancy rate. I'm glad to see that there are a lot of jobs still downtown.

[ita]

I don't know if this is posted somewhere else, but Colliers did a year end/Q4 office market report for 2022. Found while looking for data to compare to Minneapolis. I saw a report that they had 21 million square feet in vacancy. In comparison, the whole Omaha office market is composed of 35 million square feet. Anyway here is a link where you can download the Omaha report:

https://www.colliers.com/en/research/om ... ket-report

Omaha seems to be fairing well. Overall vacancies were at 9%, but Downtown vacancy was at 6.4% and Midtown 7.2%. These were among the best vacancy rates by area and garnering near highest rents and having decent amount of space under construction.

[skinzfan23]

I found this on Des Moines' 4th quarter report:

The amount of vacant office space in Des Moines’ central business district has more than doubled in the past four years, according to CBRE’s fourth-quarter market report. In 2022’s fourth quarter, 17.9%, or 1.16 million square feet, of the downtown area’s more than 6.5 million square feet of office space was vacant, the report showed. In 2019’s first quarter, 7.6%, or 477,573 square feet, of downtown’s office space was vacant, CBRE data showed.

Add to that all the vacated buildings that Wells Fargo is leaving downtown for W. Des Moines and that % is going to jump even higher since the combined space between those buildings is over 870,000 square feet. (so if I do the math correctly that would bring it to around 31.2% if everything else holds constant.)

Either way, lets hope that Omaha leaders continue to push for downtown Omaha and added jobs and housing. (the streetcar and Mutual's building should help both)

[Louie]

I found this on Des Moines' 4th quarter report:

The amount of vacant office space in Des Moines’ central business district has more than doubled in the past four years, according to CBRE’s fourth-quarter market report. In 2022’s fourth quarter, 17.9%, or 1.16 million square feet, of the downtown area’s more than 6.5 million square feet of office space was vacant, the report showed. In 2019’s first quarter, 7.6%, or 477,573 square feet, of downtown’s office space was vacant, CBRE data showed.

Add to that all the vacated buildings that Wells Fargo is leaving downtown for W. Des Moines and that % is going to jump even higher since the combined space between those buildings is over 870,000 square feet. (so if I do the math correctly that would bring it to around 31.2% if everything else holds constant.)

Either way, lets hope that Omaha leaders continue to push for downtown Omaha and added jobs and housing. (the streetcar and Mutual's building should help both)

I think Omaha has been more focused on keeping the office vacancy rate low in the core. That or we've just been lucky.

[skinzfan23]

Here is the link to the Des Moines numbers and story:

Wells Fargo lists 5 downtown Des Moines properties for sale, including one officials originally said would be retained

[Omaha Cowboy]

I don't know if this is posted somewhere else, but Colliers did a year end/Q4 office market report for 2022. Found while looking for data to compare to Minneapolis. I saw a report that they had 21 million square feet in vacancy. In comparison, the whole Omaha office market is composed of 35 million square feet. Anyway here is a link where you can download the Omaha report:

https://www.colliers.com/en/research/om ... ket-report

Omaha seems to be fairing well. Overall vacancies were at 9%, but Downtown vacancy was at 6.4% and Midtown 7.2%. These were among the best vacancy rates by area and garnering near highest rents and having decent amount of space under construction.

Nice find ita..

This certainly belies a metro the US Census estimates would have us believe is not growing robustly the last couple of years.. Just another sign to the contrary…

Ciao..LiO…Peace

[ita]

I would add that we've also had many office to residential building conversions that would have contributed to vacancies in the core. I am not sure if des moines has seen the same. I hope large properties, like CPP, that purportedly have high vacancy get filled soon, either office or conversion.

[Erik]

I found this on Des Moines' 4th quarter report:

The amount of vacant office space in Des Moines’ central business district has more than doubled in the past four years, according to CBRE’s fourth-quarter market report. In 2022’s fourth quarter, 17.9%, or 1.16 million square feet, of the downtown area’s more than 6.5 million square feet of office space was vacant, the report showed. In 2019’s first quarter, 7.6%, or 477,573 square feet, of downtown’s office space was vacant, CBRE data showed.

Add to that all the vacated buildings that Wells Fargo is leaving downtown for W. Des Moines and that % is going to jump even higher since the combined space between those buildings is over 870,000 square feet. (so if I do the math correctly that would bring it to around 31.2% if everything else holds constant.)

Either way, lets hope that Omaha leaders continue to push for downtown Omaha and added jobs and housing. (the streetcar and Mutual's building should help both)

Here's hoping to a quick recovery in Des Moines! They are a vital sister city.

That said, I'm surprised to see that Omaha has more downtown office space than our smaller sibling. Des Moines has always had been far ahead of most cities with downtown space and workers. They still are for their size, but damn - i had no idea that Omaha has surpassed them and that doesn't include MofA, midtown etc

[Erik]

I don't know if this is posted somewhere else, but Colliers did a year end/Q4 office market report for 2022. Found while looking for data to compare to Minneapolis. I saw a report that they had 21 million square feet in vacancy. In comparison, the whole Omaha office market is composed of 35 million square feet. Anyway here is a link where you can download the Omaha report:

https://www.colliers.com/en/research/om ... ket-report

Omaha seems to be fairing well. Overall vacancies were at 9%, but Downtown vacancy was at 6.4% and Midtown 7.2%. These were among the best vacancy rates by area and garnering near highest rents and having decent amount of space under construction.

Nice find ita..

This certainly belies a metro the US Census estimates would have us believe is not growing robustly the last couple of years.. Just another sign to the contrary…

Ciao..LiO…Peace

The US census is an algorithm that is one shoe for all. It has no choice but to perform this way to steer away from the appearance of being a fully* political organization.

Clearly, we have learned over a century that Omaha and Lincoln is on the understinating side of it, whereas most Sunbelt cities tend* to stray on the overestimation.

[Cermak]

I found this on Des Moines' 4th quarter report:

The amount of vacant office space in Des Moines’ central business district has more than doubled in the past four years, according to CBRE’s fourth-quarter market report. In 2022’s fourth quarter, 17.9%, or 1.16 million square feet, of the downtown area’s more than 6.5 million square feet of office space was vacant, the report showed. In 2019’s first quarter, 7.6%, or 477,573 square feet, of downtown’s office space was vacant, CBRE data showed.

Add to that all the vacated buildings that Wells Fargo is leaving downtown for W. Des Moines and that % is going to jump even higher since the combined space between those buildings is over 870,000 square feet. (so if I do the math correctly that would bring it to around 31.2% if everything else holds constant.)

Either way, lets hope that Omaha leaders continue to push for downtown Omaha and added jobs and housing. (the streetcar and Mutual's building should help both)

Here's hoping to a quick recovery in Des Moines! They are a vital sister city.

That said, I'm surprised to see that Omaha has more downtown office space than our smaller sibling. Des Moines has always had been far ahead of most cities with downtown space and workers. They still are for their size, but damn - i had no idea that Omaha has surpassed them and that doesn't include MofA, midtown etc

I always thought Downtown Des Moines had more office space than DT Omaha. They have three large financial companies with major operations DT, Principal Financial, Wells Fargo and Nationwide. I'm very Surprised to see that isn't the case and we actually have more downtown office space than them. I do question the accuracy of these numbers and how they were obtained. But for now I will have to assume they are correct . Wells Fargo's reorganizing has put downtown Des Moines in a weak position, at least for a while.

Here are Des Moines employment numbers from Wikipedia. Wellmark Blue Cross is also located in DT DM. It would be interesting to see a list of Omaha's largest DT employers. FNBO, UP, National Indemnity I'm sure are on the list. I do think Omaha has more office space than Des Moines if you count the entire metro and possibly by a healthy margin.

[Athomsfere]

I do think Omaha has more office space than Des Moines if you count the entire metro and possibly by a healthy margin.

I would really hope so, Omaha metro being close to double the population.

[Louie]

I do think Omaha has more office space than Des Moines if you count the entire metro and possibly by a healthy margin.

I would really hope so, Omaha metro being close to double the population.

Agreed. Even though Des Moines is a capital, it really should pale in comparison to Omaha in pretty much every category.

[ita]

I found this on Des Moines' 4th quarter report:

The amount of vacant office space in Des Moines’ central business district has more than doubled in the past four years, according to CBRE’s fourth-quarter market report. In 2022’s fourth quarter, 17.9%, or 1.16 million square feet, of the downtown area’s more than 6.5 million square feet of office space was vacant, the report showed. In 2019’s first quarter, 7.6%, or 477,573 square feet, of downtown’s office space was vacant, CBRE data showed.

Add to that all the vacated buildings that Wells Fargo is leaving downtown for W. Des Moines and that % is going to jump even higher since the combined space between those buildings is over 870,000 square feet. (so if I do the math correctly that would bring it to around 31.2% if everything else holds constant.)

Either way, lets hope that Omaha leaders continue to push for downtown Omaha and added jobs and housing. (the streetcar and Mutual's building should help both)

Here's hoping to a quick recovery in Des Moines! They are a vital sister city.

That said, I'm surprised to see that Omaha has more downtown office space than our smaller sibling. Des Moines has always had been far ahead of most cities with downtown space and workers. They still are for their size, but damn - i had no idea that Omaha has surpassed them and that doesn't include MofA, midtown etc

I always thought Downtown Des Moines had more office space than DT Omaha. They have three large financial companies with major operations DT, Principal Financial, Wells Fargo and Nationwide. I'm very Surprised to see that isn't the case and we actually have more downtown office space than them. I do question the accuracy of these numbers and how they were obtained. But for now I will have to assume they are correct . Wells Fargo's reorganizing has put downtown Des Moines in a weak position, at least for a while.

Here are Des Moines employment numbers from Wikipedia. Wellmark Blue Cross is also located in DT DM. It would be interesting to see a list of Omaha's largest DT employers. FNBO, UP, National Indemnity I'm sure are on the list. I do think Omaha has more office space than Des Moines if you count the entire metro and possibly by a healthy margin.

In terms of gross office space in DSM and Omaha downtown markets, I do wonder if these reports take into account public office space. DSM should have a decent advantage in that area as the capitol city of Iowa.

In regards of Omaha's biggest employers, if you look at lists like this one on the Chamber's website (https://www.omahachamber.org/economic-d ... onal-data/), but a handful of our largest employers have a downtown presence or are located downtown. Part of it is many of our largest employers are hospital/health and manufacturers. Still, between the biggest employers in downtown, UP (1.3 million sq. ft.) and FNBO (700k sq. ft. in FNBO tower, not including FNBO Center tower), they account for almost a 1/3 of all office space, depending on how Colliers is accounting for space. MoO is another building primarily devoted to a single employer, but will add another 800k sq. ft. to the downtown office market. It will be interesting to see how Noddle's hybrid timber office and Hine's T3 building(s) lease up in the coming years.

[Omaha Cowboy]

I don't know if this is posted somewhere else, but Colliers did a year end/Q4 office market report for 2022. Found while looking for data to compare to Minneapolis. I saw a report that they had 21 million square feet in vacancy. In comparison, the whole Omaha office market is composed of 35 million square feet. Anyway here is a link where you can download the Omaha report:

https://www.colliers.com/en/research/om ... ket-report

Omaha seems to be fairing well. Overall vacancies were at 9%, but Downtown vacancy was at 6.4% and Midtown 7.2%. These were among the best vacancy rates by area and garnering near highest rents and having decent amount of space under construction.

Nice find ita..

This certainly belies a metro the US Census estimates would have us believe is not growing robustly the last couple of years.. Just another sign to the contrary…

Ciao..LiO…Peace

The US census is an algorithm that is one shoe for all. It has no choice but to perform this way to steer away from the appearance of being a fully* political organization.

Clearly, we have learned over a century that Omaha and Lincoln is on the understinating side of it, whereas most Sunbelt cities tend* to stray on the overestimation.

I can’t disagree..as your take pretty much echoes what I’ve been saying for quite awhile now as it relates to “estimates” from our friends in Washington, lol…

Ciao..LiO…Peace

[riceweb]

Nice find ita..

This certainly belies a metro the US Census estimates would have us believe is not growing robustly the last couple of years.. Just another sign to the contrary…

Ciao..LiO…Peace

I don't think there's much of a connection here between vacancy rates and population growth. Omaha has a very different culture than most cities. We're frugal (meaning we don't speculatively build office space in the same way), we work in the office (and still often 5x / week), and we really haven't seen major population shifts since COVID (contrast that with other major metros that have seen their outer ring suburbs explode in population). I just don't know how we could compare Omaha to Minneapolis, unless you're comparing metro numbers overall. But even then, there would still be cultural differences to account for.

We may or may not be growing, but these office vacancy numbers wouldn't tell us much either way.

[Omaha Cowboy]

Nice find ita..

This certainly belies a metro the US Census estimates would have us believe is not growing robustly the last couple of years.. Just another sign to the contrary…

Ciao..LiO…Peace

I don't think there's much of a connection here between vacancy rates and population growth. Omaha has a very different culture than most cities. We're frugal (meaning we don't speculatively build office space in the same way), we work in the office (and still often 5x / week), and we really haven't seen major population shifts since COVID (contrast that with other major metros that have seen their outer ring suburbs explode in population). I just don't know how we could compare Omaha to Minneapolis, unless you're comparing metro numbers overall. But even then, there would still be cultural differences to account for.

We may or may not be growing, but these office vacancy numbers wouldn't tell us much either way.

The Omaha metro is growing.. And we’ll agree to disagree that there isn’t at least a dotted line connection between vacancy rates and population growth..

Also, I’m not sure Omaha’s “culture” is much different than any other regional city within a days drive. We “work in office in Omaha”? Not according to most business associates I interact with. Most, at least today, work in a hybrid environment- 2/3 days home-office. I work the same split. Either 2 or 3 days working from home, about 2 days in office (this, after spending most all of 2020 and all of 2021 working from home). Pretty usual with the rest of the country I’d say (without any “scientific evidence”)..

In any case-

With all the commercial, hospitality and mixed use/residential happening in Omaha right now, and proposed for the rest of this decade, the signs all point to ONE thing for metropolitan Omaha-

Growth. ROBUST growth..

I know some of you are sick of me reiterating this- what does the eye test reveal?.. It’s okay to admit it- GROWTH…

Ciao..LiO…Peace

[Stargazer]

My sons both work from home.. and Fiserv was doing 3 days, but Frank wants us in 4 days starting May 1 now. There's a reason they call Omaha the 'silicon prairie'. It's IT heavy for its 'culture' . The fact is, if you dig into the demographics, Omaha's become a very diverse city and the culture is little different from it's larger Midwestern peers. Overlooked is the effect aggressively annexing our suburbs has on 'diluting' the diversity which the core otherwise brings (ie Minneapolis' numbers for example do not include the heavily 'white' surrounding suburbs). Nonetheless, the numbers aren't dramatically different from Minneapolis with that in mind, Omaha has a larger Hispanic population as well.

[Omaha Cowboy]

My sons both work from home.. and Fiserv was doing 3 days, but Frank wants us in 4 days starting May 1 now. There's a reason they call Omaha the 'silicon prairie'. It's IT heavy for its 'culture' . The fact is, if you dig into the demographics, Omaha's become a very diverse city and the culture is little different from it's larger Midwestern peers. Overlooked is the effect aggressively annexing our suburbs has on 'diluting' the diversity which the core otherwise brings (ie Minneapolis' numbers for example do not include the heavily 'white' surrounding suburbs). Nonetheless, the numbers aren't dramatically different from Minneapolis with that in mind, Omaha has a larger Hispanic population as well.

Good ‘ol Frankie B, lol..

In any case, real good point regarding the “diluting” of Omaha’s diversity numbers due to its ability to aggressively annex (absorb) suburban communities and areas within Douglas County using “Imminent Domain”..Without this ability, the % of diversity would be much higher within the Omaha city limits..

Even so, Omaha and metropolitan Omaha has indeed become a very diverse community…

Ciao..LiO…Peace

[strangerthings]

Where are Fiserv’s offices today? Any word on who / how much may be relocated to KC?

[Brad]

Where are Fiserv’s offices today? Any word on who / how much may be relocated to KC?

Off the top of my head: SWC 72 & Pacific, 69th & Pacific, 73rd & Pacific, 108th & Mill Valley RD (North of Dodge).

[JohnFN]

https://www.careers.fiserv.com/location-omaha

[Greg S]

It’s on the map, I was going to add Starwood. I680 and 99th, near Blair High Road.

[Stargazer]

Everyone thought jobs would disappear when HQ left Omaha, everyone thought they'd disappear when Fiserv 'acquired' First Data.. today, Omaha is still the largest single location of employees in the world for Fiserv. Coincidentally, Omaha is still the largest locations for jobs in ConAgra as well.

Whatever happens (PayPal merger/acquisition talked about as well).. Omaha will remain a major base of employment.

(in any case, I finally took my severance and ran )

[Gobears27]

I saw an article in grow Omaha about a co-working space in the 1501 Mike Fahey building. Is that building leasing as expected or are we done building office space for a while?