New Inventory Allows For More Absorption
The Omaha industrial market ended the third quarter of 2017 on a high note, with 349,921 square feet of positive absorption. This represents the highest quarterly absorption amount since the fourth quarter of 2014. Year-to-date absorption is currently 626,863 square feet, which is significantly higher when compared to 2016 total absorption which was 293,643 and 2015 total absorption of 193,322. It is anticipated that once the fourth quarter is complete, this number will be even higher. 499,680 square feet of new construction was added to the inventory for the quarter, most of which was spoken for prior to completion. Year-to-date, over 800,000 square feet of new construction has been added to the inventory as compared to 865,705 square feet in all of 2016. With almost 1 million square feet currently under construction, year-end 2017 numbers will be back to pre-recession levels of 2006. Third quarter numbers show more square footage was delivered than absorbed, causing the overall vacancy rate to tick up 20 basis points from the second quarter to 3.6 percent. As more new construction is delivered, the market should expect the vacancy rate to continue to rise slightly, approaching equilibrium of around 5 percent.