Q3 2019 Omaha Industrial Market Report
Omaha is a natural distribution hub due to its central location, strong agriculture industry, and ability to transport via rail, road, river and air. As a result, fundamentals have been sturdy traditionally, and vacancies remained compressed below 5% through Q2 2019. This has not only kept national tenants like Kellogg and Tyson Foods in the metro, but it will also bring Facebook when its data center completes in 2020. With low vacancies and availabilities, development has not been able to keep pace with the pent-up demand. This is partly due to the rising construction costs over across the cycle, and President Trump's newly introduced aluminum and steel tariffs could further affect upcoming developments. The outcomes of these trends have been increased value for the metro's industrial land, combined with strong rent gains the past four years, and an equally moderate return on investment for investors and developers. Sales volume on existing inventory has remained elevated in recent years, and prices have appreciated throughout the cycle.