It was a year of contrasts for commercial real estate sales in Omaha. Last year started out with a strong first quarter. And quarters three and four of 2020? Colliers reported that investment sales activity was steady. But then there was that second quarter.
As the researchers at Colliers put it, commercial real estate sales experienced a cliff-like drop during the second quarter of 2020. And, of course, the COVID-19 pandemic was behind this sudden fall.
That’s the big takeaway from Colliers’ fourth-quarter Omaha investment report: The pandemic did have an impact on Omaha’s commercial real estate market. How could it not? But before the pandemic hit, Omaha was enjoying a robust CRE market. After the initial shock, then, investment sales activity steadily improved in the second half of 2020.
Colliers Omaha tracked $1.145 billion of commercial real estate sales through the Omaha market during 2020. That was a dip of just 4.3 percent from 2019. And on a 10-year basis, 2020 looks even better: Colliers reported that CRE sales activity last year was just 2.3 percent lower than the 10-year average of annual Omaha sales.
The second-quarter drop accounted for much of the slowdown. Colliers said that commercial real estate sales dropped by 87 percent in the second quarter when compared to the same quarter a year ago. It was as if the investment market simply stopped.
When compared to the rest of the country, though, Omaha has survived the pandemic in relatively good shape. Overall commercial real estate sales volume dropped by 32 percent in 2020 when compared to 2019 across the nation. That’s far higher than Omaha’s drop of 4.3 percent.
In more good news, the greater Omaha economy remains relatively strong, with an unemployment rate of just 3.4 percent in November of last year. That is roughly half of the national average, according to the Bureau of Labor Statistics.
This is a big improvement. The unemployment rate here stood at 6.5 percent at the end of May of 2020.
The largest sales in Omaha last year were concentrated in apartments, with the $39 million sale of Steeplechase apartments and the $30.1 million sale of Valley View Estates leading the way. The only other deals of more than $15 million were the Bristol Square apartments at $19.75 million and the new Home2Suites by Hilton hotel, which sold for $18.75 million.