Demand by businesses to set up shop along the suburban West Dodge Road corridor remains relatively hot, despite what some called a pause in the city's overall office market recovery.
Among the latest signs is a proposed four-story office building that Noddle Cos. plans at 180th Street. The space, now marketed by an on-site placard, would be near two other unrelated developments that want to sprout near 192nd Street and West Dodge Road, offering a mix of residential, office and retail activity.
“Most office searches start at Dodge and move from there,” said J.P. Raynor of Investors Realty. “It's visibility, accessibility, prestige.”
The suburban West Dodge area — which has the lowest vacancy rate, 6.7 percent, of the city's dozen geographical markets — is a bright spot in the latest office market statistics compiled by Xceligent. Reflecting third-quarter activity, the report shows that the citywide vacancy rate has crept up slightly, to 14.1 percent.
Helping nudge the rate upward, Xceligent said, was the addition of the new Westroads IV office structure, which brought to the market 105,000 square feet of inventory and is about 25 percent occupied. Some companies downsized or moved away, and while more office space was rented than vacated the past several months, the market has yet to reach a break-even point this year.
Overall, Colliers International said in its quarterly update, the Omaha office market recovery has “taken a pause.” The headline the firm said best describes recent activity is, “trading spaces.”
“There was a lot of activity, but the activity really was people moving from one space to another,” said Barry Zoob of Colliers. “Tenants were flocking to buildings that better suited them, whether that be for location, floor plan or economics.”
Among companies trading places were COR Clearing and Berkshire Hathaway's Home-state Cos., which moved from more western sites to downtown quarters.
WebEquity did the reverse, leaving downtown for a suburban home at Westroads IV.
Zoob believes the slowed pace of office expansions was driven by uncertainty of policies and decisions made on Capitol Hill.
Raynor agreed with the trading spaces theme but expects the year to end with more new companies choosing Omaha.
“While third-quarter office statistics suggest a flat market, brokers are busy,” Raynor said.
He sees renewed interest from office users wanting up to 4,000 square feet, an indication that small companies are gaining more confidence in the market.
T.J. Twitt of the Lund Co. saw more positives than most in third-quarter results, citing a few newcomers, including one of his clients, San Francisco-based Ellie Mae, which launched a support center in Omaha, leasing nearly 11,000 square feet in the North Park business complex near 120th and Blondo Streets.
Ellie Mae was attracted by Omaha's middle-of-America location and what the city overall had to offer, Twitt said. His first encounters with the residential mortgage company were dominated by its relocation team's desire to learn about Omaha's culture more than its business climate.
“I was really a tour guide those first few visits,” he said.
Among other new Omaha office users are Leapset, an affiliate of Sysco, and Doane College, which leased space (5,500 square feet and 7,000 square feet, respectively) in the Twenty-Five building complex near 147th and F Streets.
Expansions included Woodmen of the World insurance company's leasing the sixth floor in the downtown Woodmen Tower and Tetrad's leasing 2,200 square feet in One Miracle Hills.
Several brokers said negotiations are underway for various transactions that could result in up to 250,000 square feet of office space either being leased or built.
“There are more tenants right now looking at the Omaha market for an excess of 50,000 square feet than at any time in recent memory,” Twitt said. “The RFPs (requests for proposals) going out to developers is at a high level.”
New advertising placards that dot the suburban West Dodge market signal the popularity of the city's main thoroughfare west of 120th Street.
At the First National Bank Business Park at 144th Street, construction of Tenaska's new 100,000-square-foot corporate headquarters is underway.
The Fountain West Office Park planned on 40 acres just southeast of the 192nd Street and West Dodge intersection was picked by an Iowa developer who had been eyeing Omaha for a decade.
R&R Realty Group, which announced its project this summer, is no newcomer to the office leasing business, owning 6 million square feet of commercial space in the Des Moines area.
Noddle Cos., also with numerous developments, staked out the 180th Street spot based on a client's preference. Though that company shifted plans, Jay Noddle said he felt optimistic enough to move forward with a request to Holland Basham Architects to design an 85,000-square-foot “signature building” for the area.
Noddle hopes for a spring 2014 construction start but likely wouldn't begin until a major client is secured.
“I think there is a strong market there,” he said.
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