Here’s the key stat for the Omaha office market in 2022: It ended the year with positive net absorption.
That is a rarity in office markets across the country, as companies continue to struggle with the work-from-home movement and determining how much office space they need.
But as Colliers’ 2022 fourth-quarter Omaha office market report shows, the Omaha office market bucked this trend. The local market saw enough positive net absorption in the first and third quarters of the year to outweigh the negative absorption it saw in the second and fourth quarters.
As Colliers says, Omaha’s office market is less volatile than the national office market. The suburban West Dodge submarket is an example: It saw positive absorption of 28,145 square feet in the fourth quarter of 2022 and ended last year with a total of 156,058 square feet of positive absorption.
The Central West Dodge office submarket was solid, too. It saw positive net absorption of 54,797 square feet in the fourth quarter.
Not all submarkets are created equal, though. Colliers reported that the Miracle Hills office submarket saw negative net absorption of 54,797 square feet in the fourth quarter of last year and ended 2022 with negative net absorption of 109,076 square feet.
In more positive news, Omaha’s office market ended the year with a vacancy rate of 9.2%, down 17% on a year-over-year basis.
This doesn’t mean that Omaha’s office market doesn’t have large spaces to fill. The former West Corp. headquarters at 11650 Miracle Hills Drive has 148,552 square feet of vacant space, for example. This space has been placed on the market for sublease. The Union Bank & Trust Building, a Class-A office building delivered at 14400 Davenport St. in Heartwood Preserve, also added 92,698 square feet to the office market.
Colliers says that there is little new office space available or under construction in the Omaha market. One exception is in the Builder’s District at 1501 Mike Fahey St. This building will be made of timber and environmentally friendly materials. It is the second timber-style building announced in the Omaha metropolitan area. Applied Underwriters’ new 260,000-square-foot headquarters in Heartwood Preserve is also still under construction with an anticipated completion in late 2023.
And what about 2023? Colliers says that in the Omaha market many companies are bringing their workers back to the office, something that bodes well for a stronger year in this sector. Colliers says that professional services figure to be a big occupier this year, while the medical staffing industry should see increased office leasing activity here, too.
