What a difference a year makes. That’s the headline on the first half commercial real estate investment report that Colliers recently released for the Omaha, Nebraska, market.
And it’s an appropriate one. Yes, the COVID-19 pandemic continues, with a rise of cases fueled by the Delta variant. But commercial real estate activity in Omaha during the first half of 2021 has been far more robust than it was during the first six months of last year.
According to Colliers’ report, commercial real estate sales during the first half of 2021 came in at a strong $710 million. That’s a jump of 29 percent when compared to the volume seen in the first half of 2020.
And, in what might come as a surprise to some, the first half sales this year ranked as the second highest in the first six months of a year in the Omaha market in the past decade, second only to activity in 2017’s big year.
Ed Fleming, vice president and principal with the Omaha office of Colliers, said that the resiliency of the Omaha commercial real estate market surprised him.
“If we think back to the first half of 2020 in the height of COVID, with the S&P dropping 34 percent in just over one month and the US economy contracting by over 30 percent in the second quarter, I don’t think anybody would have predicted that a year later we would see such a strong rebound in the both the volume and pricing of commercial real estate sales in the first half 2021,” Fleming told Midwest Real Estate News.
Why has the first half of this year been so strong? First, the Omaha economy remains a solid one. Colliers reports that the unemployment rate in Omaha was just 3.2 percent in June. The unemployment rate for the entire state of Nebraska in June was only 2.5 percent.
At the same time, the commercial real estate market continues to rebound across the country, something that has helped the Omaha market. According to Colliers, the country saw commercial real estate sales of $251 billion in the first half of 2021. That’s a 34 percent increase from the first half of 2020.
The sales volume in the first half of the year across the country was the fourth highest total in the past 20 years, and the third highest in the past decade.
The first half of the year also saw some big commercial real estate transactions in the Omaha market. The biggest deal of the first six months was the sale of the Metro Crossing Shopping Center for $52.9 million. Next came the $27 million sale of the Triangle Apartments and the sale of the One Valmont Plaza office building for $26.78 million.
Other sales of more than $20 million during the first half of 2021 include the Blue Buffalo Warehouse in Bellevue, Nebraska, which sold for $24.4 million, and the Orion office building in Legacy that sold for $21.9 million.
“The most surprising parts to me are that pricing has continued a strong upward march and the volume was the second-highest in the past decade,” Fleming said. “Seriously, did anybody think hotel pricing nationwide would be up during 2020 and then continue to move higher in 2021? While we all hoped that effects of Covid would subside quickly and that we would have a V-shaped recovery, it certainly feels like this has happened faster than expected given the evolving Covid situation.”
