Strong and Steady Results in Construction
Over the last two years, the Omaha industrial market has consistently experienced record low vacancy coupled with increasing rental rates. The fourth quarter of 2016 continues this trend. Overall vacancy sits at 3.2 percent while average asking rents continue to be greater than $5.00 per square foot in all industrial categories. For years, the market waited for rates to reach levels that justify the cost of new construction. Based on current market conditions and numbers, that time has come. 2016 brought over 800,000 square feet of new construction to the market, the highest level since pre-recessionary 2008. Since 2009, annual new construction sat at an average of 290,609 square feet. With 932,556 square feet currently under construction, 2017 will continue this upward trend. Additionally, over 1,000,000 square feet are classified as either planned or proposed, representing projects that have not yet broken ground. It is important to note that newly constructed space added to the market in 2016 consisted of both speculative and built-to-suit projects, showing that both investors and owner/users are confident in the market and that the time is right to build.