Q3 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 helped with job recovery as businesses reopened near the end of 20Q2. Job growth had initially fallen to past -10% in April and had recovered by more than half of those losses as of 20Q4. Financial activities has continued to grow at more than 3% year-over-year, providing much-needed support in the office-using jobs sector. Vacancies have been expanding since late 2019 in the wake of new round of supply increases. With the second-largest amount of inventory underway in the past decade, supply-induced pressure on vacancies is likely to continue in the near-term before demand has a chance to catch up and rein in vacancy expansion. The metro's continued population growth, coupled with outsized wage increases since 2010 and low population density, is a good sign for businesses in the short term. Though the pace of rent gains has continued to decelerate since early 2019, asking rents are not expected to fall below their 2018 levels. Investment has had the most drastic change and one commensurate with the abrupt start of a recession. Sales volume nearly flat-lined in 20Q3 after a stellar performance over the first half of the year that brought total volume near $150 million by mid-2020.