Q3 2021 Omaha Industrial Market Report

Omaha is a natural distribution hub due to its central location, strong agriculture industry, and the ability to transport via rail, road, river, and air. Thanks to the diverse array of demand drivers serving the region, Omaha’s industrial market has remained remarkably robust in the face of a confluence of extraordinary challenges – the COVID-19 pandemic, supply chain bottlenecks, soaring construction material prices, and persisting labor constraints. Bolstered by surging demand for e-commerce and the expansion and transformation of supply chains and distribution networks, demand for Omaha’s industrial space is at record levels. Trailing 12- month leasing volume reached an all-time high as of the end of 21Q3, registering over 50% more leased SF than the metro’s 10-year annual average. 

Meanwhile, with one of the most diverse employment bases in the nation, the profile of tenants leasing space in Omaha’s industrial market continues to broaden and span across various segments and business types. While e-commerce firms, third-party logistics providers, and traditional retailers drive demand for warehouse and distribution space, the rebound in the production-oriented, goods-producing economy has also supported heightened demand for various manufacturers.

The industrial sector’s structural strengths have resulted in an increasingly competitive investment landscape, and Omaha’s buyer pool is deeper than it has ever been. Spurred by the metro’s attractive going-in yields and long-term NOI growth upside, institutional capital has flooded the market at a historic clip over the past year. In addition to single-asset trading activity, red-hot investor demand and less uncertainty among all parties continue to generate strong demand for larger industrial transactions and portfolio deals, pushing sales volumes to new heights. Bolstered by the third most robust quarter of investment activity on record in 21Q3, through three quarters, year-to-date sales volume sits at an alltime high and outstrips Omaha’s 10-year average annual sales volume. The $168 million that has traded hands over the trailing 12 months as of 21Q3 nearly doubles the metro’s historical average.