HEARTLAND SNAPSHOT, APRIL 2008

Omaha
Kevin Jeselnik

The Omaha commercial real estate market is carrying the momentum gained from the past few years of growth into the uncertainty of the current economic climate.

“For the most part, the commercial real estate market here remains robust,” says Jeff Beals, vice president of operations for locally based Coldwell Banker Commercial World Group. “Retail vacancy is reasonable, between 10 and 12 percent, and there is new construction of both office and retail space.”

For several years, retail vacancy held steady around 5 to 6 percent, but an incredible wave of new construction from 2005 to 2007 resulted in a glut of new retail space. Most of the new space was rapidly filled, though, and the vacancy rate has leveled off at a still healthy number.

The finest indicator of Omaha’s health is the positive economic growth — the metro area continues to grow by 1 to 1.5 percent per year and there was a net gain of 8,500 jobs in 2007.

Development in Omaha has pushed back in-town during the past few years, as residents followed national trends and migrated back into the downtown area. This activity led to increased multifamily development.

“In a 2-year period, we went from 34 downtown condo units to 1,800 complete or planned units,” Beals says. “It is a shocking increase, and obviously we are not going to fill that volume overnight. Multifamily developers remain very optimistic for the long term. It is taking time, because were are still, in a lot of ways, developing the consumer base for [the in-town residential product].

Wall Street Tower Omaha, developed by Townsend Inc., is a new condo tower underway in Omaha’s NoDo district. © DLR Group

The most significant multifamily project underway in Omaha is the Wall Street Tower Omaha, a 32-story condominium on the corner of 14th Street and Capitol Avenue. The project, which was developed by Townsend Inc., may also include an extended-stay hotel on some floors, and will have ground-floor retail.

Wall Street Tower is located in the up-and-coming North Downtown area, or NoDo for short. Much of Omaha’s development activity is occurring in the area bounded by the Missouri River and Creighton University, including one of the most important ventures. The city of Omaha is exploring the possibility of developing a new $127 million, 24,000-seat baseball stadium (see rendering of proposed site on previous page) on a parking lot owned and used by the Qwest Center arena and convention center in NoDo. The park would be used to host the NCAA Collegiate Baseball World Series each year, which is currently held in Rosenblatt Stadium, an aging field in south Omaha. The Omaha AAA minor league baseball team is also in discussion to use the proposed ballpark if it is built.

Recently, the city completed a feasibility study to explore what kind of development could have the greatest impact on the NoDo area, and found that there was quite a bit of activity already underway in the area, and that a new stadium could only provide greater momentum to the area.

“We carried out a feasibility study for the NoDo area, essentially looking for some kind of accelerator for redevelopment,” says David Brown, president and CEO of the Greater Omaha Chamber of Commerce. “We are looking for mixed-use, pedestrian-friendly lifestyle development.”

Recent NoDo developments include two hotels, Homewood Suites and Hampton Inn, with a Holiday Inn and Fairfield Inn coming online soon. InPlay, a sports and entertainment complex, opened on Cuming Street, and Saddle Creek Records developed a facility housing its headquarters, a studio, concert venue, coffee shop, bar, a non-profit movie theater, and retail space, which houses Omaha’s first Urban Outfitters.

“We’ve already seen significant new development in NoDo,” Brown says. “We expect that the stadium will bring mixed-use residential development, and certainly some restaurants and bars.”

The city, and the private sector, invested heavily in the development of the riverfront, including the Qwest Center, and NoDo — covering 80 square blocks bounded by Seward to the North, 17th Street to the West, rail road tracks to the East and Interstate 480 to the south — is primed for redevelopment. Brown believes that the proposed baseball stadium is just the thing to accelerate development in the area and establish NoDo as a thriving live/work/play environment.

Beyond downtown, two massive projects are underway in the Midtown area that will redefine Omaha.

Midtown Crossing at Turner Park is a $300 million mixed-use development from Mutual of Omaha, a locally based Fortune 500 company. The project will include seven nine-story buildings featuring retail space, condominium and apartment units, and a small office component. It will wrap around a city park, and is expected to come online in full by the end of next year.

Near 72nd and Pacific streets, master developer Noddle Companies is bringing the $200 million Aksarben Village. The development will feature significant retail, office and multifamily space. Aksarben Village, which is adjacent to the University of Nebraska-Omaha, will be home to regional headquarters for LinkedIn; offices for architecture firm DLR Group and Grubb & Ellis|Pacific Realty; and retailers such as Wohlner’s, Frank’s Pizzeria and Security National Bank.

With a comprehensive plan for one of its downtown neighborhoods, and two significant mixed-use communities underway next to downtown, Omaha is poised for an in-town renaissance that is sure to keep the market growing for many years to come.

©2008 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.