Review of Applied Urban Research 1985, Vol. 13, No. 03
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University of Nebraska at Omaha DigitalCommons@UNO Publications Archives, 1963-2000 Center for Public Affairs Research 4-1985 Review of Applied Urban Research 1985, Vol. 13, No. 03 Center for Public Affairs Research (CPAR) University of Nebraska at Omaha Follow this and additional works at: https://digitalcommons.unomaha.edu/cparpubarchives Part of the Demography, Population, and Ecology Commons, and the Public Affairs Commons Recommended Citation (CPAR), Center for Public Affairs Research, "Review of Applied Urban Research 1985, Vol. 13, No. 03" (1985). Publications Archives, 1963-2000. 497. https://digitalcommons.unomaha.edu/cparpubarchives/497 This Article is brought to you for free and open access by the Center for Public Affairs Research at DigitalCommons@UNO. It has been accepted for inclusion in Publications Archives, 1963-2000 by an authorized administrator of DigitalCommons@UNO. For more information, please contact [email protected]. CENTER FOR APPLIED URBAN RESEARCH REVIEW OF UNIVERSITY OF NEBRASKA AT OMAHA APPLIED URBAN RESEARCH <b~u~ Volume XIII , Number 3 April, 1985 The Omaha Office Space Market: 1980-1984 By Donald A. Nielsen and Murray Frost Geographical Concentration Dr. Nielsen is a professor of real Introduction estate and land use economics at the The past five years has witnessed a University of Nebraska at Omaha. burgeoning of office space growth in HIS ARTICLE is an update of the Dr. Frost is a senior research Omaha and its immediate environs. T Omaha office space market study associate at the Center for Applied Historically, office space was concen that was published in the February, Urban Research at the Un iversity of trated in the downtown zone (east of 1983 issue of the Review fl[ Applied Nebraska at Omaha. Acknowledge 24th Street to the Missouri River) and the Urban Research .1 The purpose of this ment is extended to the R.J . Wilson adjacent midtown zone (24th Street to article is to provide a profile of the Company, Omaha real estate 60th Street). However, between 1965 spatial concentration of the Omaha appraisers, for data calculation and 1980, most new office space was office space market2 over the periorl assistance and office facilities pro constructed west of 60th Street and east 1980 through 1984 by examining the vided during the course of this of 156th Street between Harrison Street evolving spatial pattern of development study. on the south and Redick on the north, as well as office space distribution with the heaviest concentration occurring delineated on the basis of zip code areas. in the area bounded by 72nd Street on It iden tifies the current levels and trends the east and 156th Street on the west and for vacancies and rents for these areas. of an office buil ding. Sometimes, how between Pacific on the south and Biondo Previous market stud ies conducted ever, the difference may be due to a on the north or in zip code areas 68114 have been broad-based, concentrating building owner or agent being cooper and 68154. on the entire Omaha geographical area or ative one year but not the next, or a Omaha and its immediate Douglas large sub-areas. They have allowed only building may be considered off the County environs contained more than general market findings to be reported. office-space market because its single 4. 1 million square feet of office space The present study is a micro-study that occupant entered a long-term lease. prior to 1965, according to surveys examines market characteristics by zip (In other words the building is treated conducted by the Omaha Chamber of code area. as owner-occupied office space wh ich Commerce and by Harold Hornbeck and is usually omitted from these surveys.) Armin K. Ludwig. Nearly 60 percent Data Sources Thus, minor inconsistencies in levels of this space (2.4 million square feet) and trends between some zip code areas was concentrated downtown. One-quarter As data sources, this study employs appear in some of the tables. Therefore, of the total (1.1 million square feet) the telephone surveys conducted by the any conclusions about the distribution was located in the midtown area, while Midlands Business journal published as and in creases of office space across only 15 percent (644,000 square feet) Office Space Directories for 1980, 1982, time periods are subject to the limita was suburban. and 1984.3 Also included is a February, tions of the methodologies of these During the decade 1965-1975, an 1985 telephone survey, conducted by the surveys. However, while totally con ·additional 3.2 million square feet were R. ] . Wilson Company on the Omaha sistent data sources are not available, the added to Omaha's stock of office space, downtown office space market. authors feel that some helpful insights a gain of 76 percent. More than 60 per One caveat should be noted. The con concerning the office space market are cent of this gain (1.9 million square feet) sistency of the data varies from survey to revealed from a comparison of the sur was suburban. Midtown received 5 per survey. That is to say, for a variety of veys with respect to vacancies and rental cent of the gain (less than 200,000 square reasons, a number of buildings surveyed rates as well as the evolving development feet), while downtown accounted for in one year may not have been included patterns and concentration of office app roximately one-third Uust over one in the survey for another year. space by zip code areas analyzed for million square feet) of the increment. Sometimes this difference is logical Omaha and its immediate Douglas During the period 1976-1980, approxi such a~ the construction or demolition County environs. mately 2.8 million additional square feet 2 3 experiencing vacancy rates of 7.9 percent 25.0 percent for zip code area 68154. were added to Omaha's inventory of percent with 2,2 97,000 square feet listed prices between 1980 and 1984 for the being available and 8.8 percent being and 42.2 percent , respectively. By 1984, Clearly, adding additional sp ace standing stock of office space, a gain of on the inventory. various zip code are as. vacant in area 68114 . Zip code area the overal l vacancy rate for the study between 1980 and 1984 more tha.1 3 7.4 percent. This increase was dis Du ring 1980, the Om aha office market 68154 experienced a vacancy rate of zip code areas had climbed to 16.2 per doubled the vacancy rate downtown tributed between downtown which Vacancy Trends within the zip code areas studied, 12 percent in 1980. In 1982, the overall while the other areas were able to absorb received 2 2 percent of the gain ( 615 ,000 experienced an overall vacancy rate of vacancy rate for the city had risen to cent, with the downtown rate rising to 20.1 percent and the vacancy rate for much of the new space. The increasing square feet), the midtown area which Tables 1-3 present profiles of the levels 10.8 percent with 8.7 percent of the 15.6 percent with buildings downtown vacancy from 1980 to 1984 can be received 2.4 percent (66,000 square feet), and trends of vacancy rates and rental total d own town space (zip code 68102) having a 13.1 percent vacancy rate zip code area 68114 decreasing to 5.6 explained by three factors. One is the and the suburban area west of 60 th Street and zip code areas 68114 and 68154 percent, while the rate decreased to construction of additional new buildings. which received 7 5.6 percent (2. 1 million The second is an increase in the renova square feet).4 tion and conversion of existing older According to the Midlands Buisness TABLE 1 OMAHA OFFICE SPACE DIST RIBUTION BY Z IP CODE AREA 1980 TABLE 3 buildings which had previously been used journal surveys, by 1980 Omaha and its BY Z IP CODE AREA 1984 OMAHA OFFICE SPACE DISTRI BUTION for purposes other than office space, environs in the zip code areas of study Total Available Percent Average possibly due to the tax incen tivcs for had nearly 7.4 mil lion square feet of Square Square of Rental Total Available Percent Average of Rental renovating older structures provided by office space. By zip code areas two Zip Number Footage Percentage Footage Square Rate per Square Square of of of Footage Square Zip Number Footage Percentage Footage Square Rate per nodes stood out. The downtown area Code for the 1979 Tax Act as refined in the 1981 Area Buildings Buildings Total Leasing Vacant Foot Code of of of for Footage Square Economic Recovery Tax Act. The third (zip code area 68102) had approximately Area Buildings Bu ildings Total Leasing Vacant Foot factor was the general decline in the econ one-fourth (26.3 percent) of the space, 68102 23 1,945,032 26.3 169.674 8.7 $6.57 omy between 1980-1982 which resulted and zip code 68114 (the area between 68104 3 59 ,000 0.8 6,500 11.0 4.83 68102 34 2,733,826 26.7 549,840 20.1 $10.10 68104 2 58,000 0.6 14,200 24.5 4.25 in a decrease in the rate of office space 72nd and 1-680, and Pacific to Biondo) 68105 3 79,500 1.1 2,000 2.5 6.00 68106 10 422.000 5.7 16,074 3.8 6.98 68105 4 103,141 1.0 29,576 28.7 6.44 absorption as a result of business condi had 2 2.