Q1 2020 Omaha Office Market Report
A diverse economy is the bedrock of Omaha's strong office fundamentals. Several Fortune 1000 and 500 companies reside here, as well as a growing number of startups in what is known as the "Silicon Prairie." The strength of the economy has kept the unemployment rate at or below 3%, which is among the lowest in the state, as well as the nation. Job growth was well above the national in early 2020 following a resurgence that began in the middle of 2019. Although job creation remains sound, absorption over the next few years could continue to weaken in conjunction with the tight labor market. Vacancies have remained near or below 7% since late 2015, despite some volatility in demand. Indeed, the metro's continued population growth, coupled with outsized wage increases since the recession, is a good sign for businesses in the short term. Though the pace gains has decelerated since early 2019, moderate rent growth the previous four years has been a testament to these conditions. Investment was at its lowest point in seven years in 2019 and average cap rates in 20Q1 were at their highest level in recent history.