HEARTLAND SNAPSHOT, NOVEMBER 2007

Omaha Retail Market

Retail development activity in Omaha is being driven by two major trends that are tethered together. The first is the outward expansion of retail into the perimeter of Omaha, particularly in the south and west parts of the city, and the other is the renovation of many older centers in the city to directly compete with this new construction.

Shadow Lake Towne Center, which opened this past spring, is a part of the outward growth movement. Located on the south side of the market at the interchange of Interstate 370 and 72nd Street in Papillion, Nebraska, the 880,000-square-foot shopping center was developed by RED Development in a joint venture with The Lerner Company, and is similar to another lifestyle center, Village Pointe, which was developed by RED 5 years ago on the west side of Omaha. The southern and western parts of the city around these new developments are seeing strong increases in population, with an annual population growth of 5 percent.

“In order to compete with new construction, owners and developers are realizing they need to freshen up their assets,” says Jon Pesce, vice president of business development with Omaha-based Seldin Company.

Montclair on Center is one of the shopping centers that has been renovated by Seldin Company to compete with the newer centers being built in Omaha.

One of the renovation projects Seldin has undertaken is Westwood Plaza, a 510,000-square-foot power center located at the intersection of 120th and Center streets that was originally built in the 1970s. Westwood Plaza is home to tenants such as Baker’s, Office Depot, Burlington Coat Factory, TJ Maxx and the eight-screen Westwood Cinema. Seldin is also renovating another older center, Montclair on Center, located at 132nd and West Center. The 250,000-square-foot power center features tenants such as The Sports Authority, Michael’s, Marshall’s and Hancock Fabrics.

On top of the numerous shopping center revitalizations around town, many developers are also seeking parcels of land for redevelopment. 

“I think what retailers are realizing is that there isn’t the population density yet that far out [in the perimeter of the city],” Pesce says. “So, we’re starting to see a resurgence of retailers heading back into the core of the city.”

One of the focal points of this has been the resurgence of north Omaha.

“There are a lot of blighted areas on the north side, and there’s been an attempt to do a lot of redevelopment there,” Pesce says. The Omaha Chamber of Commerce is currently doing a redevelopment study of the area but, in the meantime, Seldin is developing its own project.

Benson Park Plaza, located at the corner of 72nd Street and Ames Avenue, was once a shuttered Kmart but has since been taken over and redeveloped using TIF funds. Seldin has approximately 60,000 square feet of the center to complete before it opens at the end of 2008, but tenants signed so far include Baker’s, The Home Depot, Hancock Fabrics, McDonald’s, Arby’s and Famous Dave’s Bar-B-Que.

The glut of development in the city has its downsides, though. There is currently 3 million square feet of vacant retail space in the market, and the vacancy rate has soared — from 8.5 percent in 2005 to estimates of more than 12 percent by the end of 2007.

Despite higher-than-wanted vacancy rates, the market remains strong in the Omaha, especially with the city in talks about the creation of an entertainment district in the North Downtown (NoDo) district.

“Currently we have the [College] World Series here in Omaha and the city has basically been told that if it wants to keep [the event] in Omaha, the existing facility is inadequate, for lack of a better word,” Pesce says.

The city has used this mandate as a catalyst to create a NoDo entertainment district, with the new baseball stadium as the centerpiece. “That’s really going to revitalize and spark a lot of development in that area,” Pesce says.

With all the talk centering around the heart of the city, new construction has followed. Development is already underway on Midtown Crossing at Turner Park, as well as Aksarben Village in the NoDo. Aksarben Village is a 70-acre urban infill project located on 72nd Street that is being developed by Noddle Companies and Magnum, and will feature office, residential, retail and entertainment components. It is scheduled for completion in summer 2009. With the recent opening of the Saddle Creek Records office in the area, NoDo is set to become an entertainment hotspot in the city.


©2007 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.