CRE c Nebraska

Kyle Peterson: Deals getting done in Omaha

Kyle Peterson, managing director of brokerage for the Omaha office of Colliers International, sees plenty of hope for his city's commercial real estate market. Deals are getting done today in his Midwest city, he says. And that's some welcome good news.

Kyle Peterson, managing director of brokerage for the Omaha office of Colliers International, sees plenty of hope for his city's commercial real estate market. Deals are getting done today in his Midwest city, he says. And that's some welcome good news.

An improving market: Are we seeing more commercial real estate activity? It definitely feels like it. The only one sector in which we haven’t seen much of an up tick in is in the investment sales side. On the office side, there has been significantly more activity in the last six months. Our retail folks are saying the same things. Our industrial vacancy rates are now down to around 6 percent. It feels like activity has returned.

Closing deals: And it’s not just people kicking the tires. People are actually doing deals. I think that from a tenant standpoint there are still good deals out there. I would assume that people today have more of a comfort level with their businesses, too. That all helps to increase the activity.

Insulated: The nice thing about Omaha is that we tend to be somewhat insulated from the national economy. It’s not as bad here as it has been across the country as a whole. That is part of the reason why we’re seeing more activity here, too. There are a lot of businesses that are based here that are fairly healthy and are growing. When that growth happens, it leads to the need for updated facilities or increased space.

A tamer housing market: The other thing that I think has benefited us is that our housing market wasn’t hammered like it was in other areas of the country. You don’t see people whose valuations of their homes have gone down 25 to 30 percent. Our housing market is certainly not robust right now, but comparatively speaking, it’s not bad, either.

Affordable: The cost-of-living is still attractive here. It simply costs less to live here. From an employer’s standpoint, that makes Omaha more attractive. When you can offer employees affordability, it’s sometimes easier to attract people. And when it helps you the most is when the economy isn’t as strong. People know they can get more for their dollar. Omaha is a “what you see is what you get” town. That really figures in positively. People who have done business here for a long time do business here for a reason. They know they can trust people on the other side of the table. In an economy like this, this all helps you to flourish.

A look ahead: I think we will finally be getting to the point where we start to see some more office development in the next 18 months. We’ve seen little of that so far. By and large, all of our new office deals have all been 100-percent-occupied long-term build-to-suit projects. We should start to see some projects in the next 18 months that won’t require 100 percent occupancy for build-to-suit. We certainly won’t be going back to the spec days, but we should see some equilibrium in the middle. The supply-and-demand curve is tilting more toward that place where developers have more interest in building again. We are seeing that in all sectors, not just in the office sector. If you have a 6 percent vacancy rate in industrial, it stands to reason that you will at some point see new product. There almost has to be. And we will see that across all sectors.