Commercial building in Omaha expected to slow slightly
Despite drastic changes coming to commercial building nationwide, an economist says Omaha will likely see a small increase. However, downtown could be an exception.
Despite drastic changes coming to commercial building nationwide, an economist says Omaha will likely see a small increase. However, downtown could be an exception.
Despite drastic changes coming to commercial building nationwide, an economist says Omaha will likely see a small increase. However, downtown could be an exception.
Berkshire's vice chairman warns the commercial property market is in trouble but according to economists and business owners in Omaha, that's not the case here.
Chris Decker, a UNO economist, said Omaha's always had a pretty steady economy. While we may see growth in commercial development slow, he said it likely won't be drastic.
"We have a relatively diversified economy, so we don't go through the high booms and busts in terms of the business cycle that a lot of other cities of similar size tend to do," Decker said. "We've had some recent activity on some pretty major construction projects."
Decker said commercial building permit numbers have been decreasing since 2022 as interest rates increase. While some builders may continue buying properties to prevent locking in a higher interest rate in the future, the growth we see will likely get smaller.
"That might show up as a slowdown in our overall city's economy," he said.
Decker predicts a less than 1% decrease in growth.
However, with projects like the Mutual of Omaha Tower, downtown Omaha could be the exception.
"That could lift a lot of demand and could spur some additional construction and perhaps reconstruction of buildings as well," Decker said.
Right now, Omaha's downtown scene is flourishing and as foot traffic increases, businesses are paying attention.
Kristi Andersen, the vice president of brokerage at CBRE, said several businesses are opening in the capitol district in the next month.
One of those is The Fatt Putter Golf Lounge, opening in June. Owner Michael Worley said the space in his building and the foot traffic attracted him to the new location.
"Downtown area is just good for my business based on positioning and how we've got everything working on our locations," Worley said.
CBRE statistics show retail vacancies are at less than 7%.
"Look around downtown and you'll see a lot of projects coming out of the ground," Andersen said.
She expects this trend to continue. Andersen said office inquiries are starting to pick up again, too, as people move away from the pandemic.
"I know what's happening because my phone rings," she said. "If I'm doing tours and people are looking at space, that means people are wanting to be here. They're back out looking at things and that's an optimistic sign for us, too."
Decker said his prediction is based on the history of Omaha's economy over the last 50 years, but things could change depending on what happens overseas politically.
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