Commercial activity in west Omaha flourishes
Commercial real estate activity in Omaha is on the rise, led in part by businesses clamoring to occupy space along the city’s western edge.
New commercial developments are going up along the West Dodge Road corridor, such as the new development at 168th and Dodge that will soon be the home of Deeb Realty. Near 180th and Dodge, Berkshire Hathaway Home Services Ambassador Real Estate is preparing to break ground on its new office space. Near Oak View Mall, multiple tenants including Elite Cheer will soon occupy the long-vacant, former Hy-Vee building.
The wave of new projects comes after years of stagnation, and developers are enjoying the ride. “Right now the Class A office market is extremely active, especially along West Dodge Road,” said Dale Scott, executive vice president of CBRE|Mega Corporation, a company that provides commercial real estate services.
Things are so good, in fact, that rental rates have started to climb, he said. The deals of the recession period are getting harder to find, and prime locations along Dodge are limited. Andy Alloway, owner of Deeb Realty, sensed the opportunity three years ago and purchased land at 168th and Dodge in order to build his company’s new home from scratch.
“We felt, for our company, the Dodge Street corridor was a fantastic area and the best area possible for an Omaha business, especially for a business like ours that needs visibility,” he said. “There is a very limited amount of Dodge Street space, and this was an opportunity for us.”
The latest numbers reveal a city bursting with commercial real estate activity. Colliers International reports that office vacancies in the second quarter of 2014 fell to 11.7 percent, the lowest quarterly vacancy rate in 12 years. Nationally, the vacancy rate is a stagnant 16.8 percent.
The retail market is similarly strong. The vacancy rate at the end of the second quarter was 7.6 percent, Colliers International reported.
Omaha’s expanding job base has fueled the growth. Private job sector growth accounted for 8,700 new jobs in the last 12 months, according to the Greater Omaha Chamber of Commerce. The employment rate was 3.8 percent at the end of May, one of the nation’s lowest rates.
Given the uptick in activity, businesses are eager to pounce on desirable locations. “West Dodge has always been, and will probably always be, the hottest corridor,” Scott explained. “Anything west of 90th Street is in demand right now, and the larger spaces are becoming very difficult to find.”
One reason businesses are flocking to west Omaha is obvious: business follows people. As Omaha’s residents have moved west, businesses are serving both customers and their employees by adopting more westerly locations. Employees get a shorter commute time and the benefit of close-to-the-door parking.
West Omaha properties are also newer. “They come with new HVAC, higher parking ratios, and amenities you just won’t find in older buildings,” Scott said.
By building new at 168th and Dodge, Deeb Realty had the opportunity to create a customized office with open, collaborate spaces for agents, and a family-friendly playroom for customers’ kids to enjoy. “You can do your closing paperwork as a customer and your kids are taken care of,” mentioned Alloway.
The 45,000-square-foot building also meets Deeb’s need for additional space. In 2001, the company had 20 agents. Today, with over 300 agents, the company is bursting at the seams at its current location at 117th and Center Streets. In April 2015, Deeb Realty will move into the first two floors of the new building, leaving the top floor to be leased to other firms.
Vince Leisey, president of Berkshire Hathaway Home Services Ambassador Real Estate, said his firm is also facing the constraints of limited space. At his current office at 132nd and Dodge Streets, “we literally have no space left for agents,” he said.
The company’s future site at 176th and Burke streets near Village Pointe will include a three-story, 72,000-square-foot building with plenty of room to grow for the company’s current 400 agents. Leisey expects to hire another 100 agents before the move.
Leisey selected the Village Pointe site for its prime location along Dodge in a growing part of the city. “It’s a simple math problem,” he explained. “You look at where the vast majority of the activity is, and it’s out west for us.”
Business leaders say they see more opportunities for their companies to flourish in their new west Omaha locations. The need to accommodate his growing business spurred Kevin Hooker to secure the former Hy-Vee building near Oak View Mall. Elite Cheer, a cheerleading and gymnastic studio, serves about 900 athletes — a number Hooker expects to rise. “Because of the high visibility, we expect to increase our numbers and grow 25 to 30 percent, which is huge for us,” stated Hooker.
The renovated building will triple the students’ tumbling area and add a martial arts space. Elite Cheer will utilize about 27,000 square feet of the 62,000-square-foot building. A rock climbing and family entertainment company has signed on as a second tenant, and the remaining space is available for other tenants.
By building new, Leisey of Berkshire Hathaway Home Services Ambassador Real Estate aims to create a space that fosters a culture of energy and activity. “For us, the big advantage is to create a crazy cool office space that allows us to create energy and excitement,” he said.
The future building will offer amenities such as underground parking, an employee gym, and abundant, Google-like collaborative spaces, described Leisey.
Leisey also persuaded Pitch Pizzeria to join the venture. The restaurant’s second Omaha location will be next door to the office building and offer a shared patio area and rooftop bar. “There’s really never been a collaboration in Omaha between a restaurant and Class A office space like this,” said Leisey.
Alloway anticipates Deeb Realty’s westward move will better position the company for the future. He is especially excited about the high visibility the company will have along Dodge. “We feel this will be the perfect spot to promote our company, highlight who we are, and demonstrate our brand,” he said.
Scott from CBRE said the number of quality developments in the works, combined with the city’s efforts to streamline its processes, has stoked his excitement about the future.
“It is a testament to the Omaha area that investors continue to be optimistic about our market,” he stated.