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					Commercial Real Estate




                                         December 2008


                                 Omaha’s retail
                                 Space Market                                                         2009
                                                                                                   Picture for
                            Omaha’s retail market is experiencing more vacancies
                            in 2008 than in previous years. Suburban strip spaces                 Retail Stores
                            with no major retail anchor are the most affected.                      is Bleak
                            National closings by Starbucks, Linens & Things, Wild
                            Oats, Bombay, Harold’s and Baker’s have grabbed the
                            local headlines. Many others are on the watch list. We
        Sales&              are also seeing some locally owned retailers closing
        Leasing             their doors, while others continue to assess their
   John Dickerson, CPM      options and ability to keep their doors open.
        Lee Ehlers, CCIM
            Brian Farrell
Steve Farrell, CCIM, SIOR   Omaha rents are down about                                       National Headlines
           Dan Fishburn     10 percent from their                                              Grab Attention
         Stephen Forbes     peak two years
Ember Grummons, CCIM                                                                   In November Forbes.com reported Target
              John Heine
                            ago. Tenant
   Jerry Heinrichs, CCIM    Improvement                                                Stores would reduce its capital spending by
      Jerry Huber, CCIM     Allowances and                                             $1 billion to “conserve capital while the
     Tim Kerrigan, CCIM     other concessions                                          retail and credit environment remains
             Brian Kuehl
     Mike Moylan, CCIM      have increased as                                          challenging.” This report echoes similar
   RJ Neary, CCIM, SIOR     landlords try to help                                      projections within the retail trade sector.
              J.P. Raynor   merchants through
        Patrick S. Regan
                            the current economic                                       Nationally, predictions are that retail store
          Clint Seemann                                                                closings could double in 2009. Closings in
  Ryan Zabrowski, CCIM      slowdown, and national
                            retailers are seeking rent                                 2008 are expected to be around 6,100. In
                            reductions as they                                         2009, predictions are that closing may
                            negotiate 2009-2010 lease renewals.                        reach 14,000. Forbes magazine says retail
  Property                                                                             will see its worst Christmas shopping
Management                  New construction on retail projects is down although       season in 17 years. Retailers are closing
             Cary Allen     construction continues on several projects. At Aksarben    under-producing stores, slowing or
        Carla Chin, CPM     Village there are five restaurants, two hair salons, two   suspending expansion of new stores,
        Correen Harrell
     John Krecek, CPM       banks and a grocery that have opened or will open by       cutting back spending on long-term
     Molly Pearson, J.D.    Spring of 2009. Wohlner’s Grocery, Security National       projects and reducing inventory.
       Jeni Sadler, CPM     Bank, Jimmy D’s and Blue Planet Natural Grill opened
        Jeanette Weber      recently. Midtown Crossing at Turner Park recently         Shopping Center Business predicts the
      Debbie Wojcinski                                                                 current retail environment marks the end
                            opened its condominium showrooms and has
                            announced commitments for a health club and hotel,         of a robust growth in new stores and the
                            although no restaurant or retail store announcements       beginning of a new retail cycle. They also
                            have been made.                                            predict that 2008 holiday sales will be flat.
                                                                                       They believe the increase in store closings
                            Other large retail projects under construction are the     and bankruptcies reflect structural issues
                            shops surrounding SuperTarget at 168th and Maple,          that will need to be changed before we see
                            which include PetSmart, Sports Authority, and Hobby        retail recoveries. The recovery will be slow,
                            Lobby.                                                     with women’s apparel struggling the most.
               Commercial Real Estate


             DIGEST                         December 2008
                                                                                                              402-330-8000




Property management team thanks
vendors for service to clients
On September 25, the Investors Realty Property Management team said
“Thank You” to the many vendors who help them provide services to our
property management clients.

Members of the Property Management team hosted 37 vendors at a
barbeque lunch served by Ozark Smoked Meats. But it wasn’t a “free
lunch.” John Krecek, Director of Property Management, thanked the
vendors for their service and asked them to complete a survey about their
relationship with Investors Realty. Vendors were also encouraged to give
us suggestions on how we can improve our communications with them
and give better service to our clients.




NACPO watches 2009
legislative issues
                                                                                 Papio NRD Considers New
                                                                                 Storm Water Control Plan
                                                                                The Papio Natural Resource District is
                                                                                considering a new plan for storm water
                The Nebraska Association of                                       control. This plan has to be in place by
The Nebraska    Commercial Property Owners                                          next summer to enable the NRD to
                (NACPO), will watch the action                                        continue their contract with the
Unicameral’s                                                                            federal government.
                on bills concerning storm water
2009 session is fees, property tax valuation and
                                                                                           Washington County is pushing
coming soon! bills affecting swimming pools                                                  for the plan to include
                at multi-family properties.
                                                                                            alternative measures for storm
   Pressure to pass storm water fee legislation                                          water control versus building more
   grows with each legislative session as more                                               dams. Alternative measures
   Nebraska cities become eligible for                                                          would include pervious
   requirements under the National Clean Water                                                 paving systems, larger water
   Act. NACPO in coalition with other                                                          retention systems on
   organizations will continue to monitor this issue.                                          developments, rain barrels,
                                                                                          etc.
   None of the nine bills introduced to deal with the way the
   Tax Equalization and Review committee handles appeals            The plan would require commercial and multi-family
   made it out of committee in 2008. NACPO plans to have            developments to pay fees of approximately $10,000 per
   another bill introduced in the next session.                     acre. In addition, a considerable amount of land in
                                                                    northern Douglas County and two areas in Sarpy County
   The swimming pool bill would have required pool                  would be highly restricted to development. NACPO
   operators of Class B pools to have an operator on duty           encourages the commercial development industry to get
   the entire time the pool was open. Last session, it was          involved in this discussion or risk reduction of future
   killed in committee. It is on the watch list for next session.   development potential.
                  Commercial Real Estate


                DIGEST                         December 2008
                                                                                                                402-330-8000




                                             Did you
                                             hear
                                             us on
                                             Husker
                                             Game
                                             Days?



     Investors Realty was a sponsor of Nebraska
football game broadcasts on KFAB radio. The
commercials highlighted properties being leased,
sold and managed by Investors Realty broker and                                        These Investors Realty
property managers. In addition to the radio                                            employees cleaned up the
                                                                                       Keystone Trail in September:
broadcasts, Investors and property owners have
displays at the Big Red Breakfasts held every Friday                                   Jeni Sadler, Chris Thranm, Nicole Morrison,
during the football season.                                                            Laurie Alvord, Juli Ray, Val Dekle, Angela
                                                                                       Sanchez, Jeanette Weber, Molly Pearson,
“We know these broadcasts are very popular                                             Carla Chin, Tiffany Simmons, Shana Walinski,
around the region, and we think this is a good way                                     Julie Messer, John Heine, John Krecek, Dan
for us to let companies know about properties for                                      Fishburn, and Jerry Huber




                                                                   3
lease in the Omaha area,” said Tim Kerrigan. “Just
like Coach Pelini will evaluate his team at the end of
the season, we’ll evaluate this advertising campaign
to make it more effective for next year.”

                                                                             join the
                                                    Investors Team
Investors Realty is                                 Correen completed her MBA with an accounting concentration at the
pleased to welcome                                  University of Houston-Victoria. She earned a bachelor of science in business
Correen Harrell,                                    management at LeTourneau University in Longview, Texas, and is a
controller and chief                                graduate of St. Cloud Business College, St. Cloud, Minnesota.
administrative officer,
                           CORREEN HARRELL




Lisa Webb, accounts                                                         Lisa is a graduate of the University of Nebraska
payable and                                                                 Lincoln where she earned a degree in Business
receivable clerk, and                                                       Administration. Prior to joining Investors, she
Cary Allen, property                                                        worked for NEI Global Relocation.
maintenance
                                                                                                      Cary, along with three
management
                                                                                                      other full time
specialist, to our team.
                                                                                                      maintenance staff,
                                                       LISA WEBB




Correen is responsible for overseeing the                                                             provides services to
accounting, human resources and office                                                                properties managed by
administration functions.                                                                             Investors Realty. Prior to
                                                                                                      joining Investor Realty,
Prior to joining Investors Realty, Correen worked for Pitney Bowes-PSI in                             Cary was an apartment
Omaha. She relocated to Omaha in 2007 from the Houston area where                                     supervisor for three years.
her accounting experience included controller positions for privately
                                                                             ALLEN
                                                                             CARY




and publicly held companies.                                                                          We’re pleased to have all
                                                                                                      three on our team.
              Commercial Real Estate


            DIGEST                                                                                          402-330-8000


                                                               2-3
                                     December 2008


         Greer predicts                                         years               of pain
          in Commercial Real Estate market
“Most of the big stuff has already                  of buildings in relationship    office buildings are in somewhat
hit the fan. Now we will feel the                  to the demand and the            better shape, and apartments appear
pain slowly for the next two to                   vacancy rates are tolerable,      to be the best real estate products in
three years,” said Everett “Allen”                he explained.                     this market.
Greer, director of research
for Bank of America’s                                    However, he said, the      Many lenders are closing or reducing
Real Estate Risk                                             troubles are in        volume as financing costs have
Assessment Division,                                         consumer               risen. Rents and vacancies should
during the October                                          confidence, and in      continue to perform okay, but
2008 SIOR (Society of                                       the interest and        property values will undergo a
Industrial and Office                                      financing issues         correction of two-thirds of the real
Realtors) conference in                                    facing the real estate   value of the property before creeping
Minneapolis.                                              industry. According to    back up to the property’s actual
                                                         Greer, borrowing rates     value.
Greer feels the worst                                   for commercial real
problems in the real estate                            estate will rise.            He predicts that REITs are now at
market have surfaced, but                                                           their low and will stay down for a
that it will take several                             He predicted that the         long time. Rents will continue to
years before the correction                         growth in rent will lag         grow unless the American consumer
is complete. His predictions are                  behind the Consumer Price         doesn’t begin to buy again. That
that Commercial Mortgage                        Index (CPI), and that value         would hurt every real estate sector.
Backed Securities (CMBS) will                   growth will lag rent growth by      He feels the health care sector,
come back but with a new                        30 percent. Property values are     especially CCRCs (Continuum of Care
business model more like the one          down 5 to 15 percent and cap rates        Retirement Communities) will catch
that existed in the 1980s.                are up 2 to 2.5 points.                   on and get bigger and bigger.

Greer told the gathering the              Retail products are in the worst
fundamentals of the real estate           shape, Greer said. Industrial and
industry are “not terrible.” The supply




       On June 27th straight-line winds in excess of 100 miles an hour blew through the
       Omaha metropolitan area leaving a path of destruction from western Douglas
       County into Iowa.

       Properties managed by Investors Realty sustained in excess of $625,000 in
       damage. Most of the damage was to HVAC units located outside and on roofs.
       Eighty-seven units were repaired and 75 replaced with a total cost of $415,000.
                                                                                            Big  winds
                                                                                                    cause
       Damage to roofing and siding cost another $210,000.

       Earlier in 2008 Investors Realty arranged a blanket insurance policy covering
       many client accounts. In addition to reduced insurance premiums, the owners and
       tenants also benefited from a single $1,000 deductible for the multiple building
       account. That meant that our clients paid only $67 per building for repairs.            damage
                         WHA WE’VE DO
                            T        NE
                                                              December 2008
                                                                                                    TEL
                                                                                                  LA Y
LAND
    PENDING   3.9 acres industrial land at 109th & Rainwood Avenue




                                                                                                                       busy!
     SOLD     1.3 acres residential land at 419-29 South 83rd Circle
     SOLD     1.0 acre office land at 204th & West Dodge Road, Elkhorn
     SOLD     0.8 acres industrial land at 35th & Harlan Lewis Road, Bellevue                               We’ve
    PENDING   0.7 acres commercial land at Lots 11 & 12, Metro Crossing, Council Bluffs                     been
BUILDINGS
    LEASED    119,330 sq. ft. commercial building at 360 North Saddle Creek
    PENDING
    PENDING
    PENDING
              48,000 sq. ft. commercial building at 25th & Capehart, Bellevue
              39,892 sq. ft. office building at 102nd & F Street
              37,000 sq. ft. industrial building at 120th & Cary Circle, La Vista                                 Helping
    PENDING
     SOLD
      SOLD
              26,400 sq. ft. commercial building at 1012 South 74th Plaza
              25,146 sq. ft. apartment building at 16th & Adams Street, Blair
              16,871 sq. ft. industrial building at 3215 South 66th Avenue Circle
                                                                                                                  tenants Grow
    LEASED    16,338 sq. ft. commercial space at 15th & Cuming, to Barley’s Tip Top, Inc.                     Creighton Family Medicine
    LEASED    11,000 sq. ft. industrial space at 14th & Nicholas Streets, to Weathercraft                    Expands in the Old Market
    LEASED    10,656 sq. ft. industrial space at 94th & G Streets, to Netflix, Inc.
    LEASED    10,025 sq. ft. commercial space at 156th & West Center Road, to I Think Fit, Inc.
    PENDING   9,113 sq. ft. commercial building at 3021-25 Farnam                                           What’s the big deal about a little deal? It can
     SOLD     7,021 sq. ft. commercial building at 14th & Farnam                                            lead to big things. Leasing a small 900-square-
    LEASED    5,700 sq. ft. office space at Harvell & Fort Crook Road, Bellevue, to Science Applications    foot space in 1996 for a start-up medical
               International Corporation                                                                    practice in downtown Omaha to Dr. Mark
    LEASED    5,655 sq. ft. office space at 146th & California Street, to Nebraska Title Company, Inc.      Goodman began a sequence of events
    LEASED    5,000 sq. ft. industrial space at 10th & Capitol, to The Market Church
    LEASED    4,909 sq. ft. commercial space at 180th & Q, to Paradigm Educational Center                   occurring over 12 years in the Bakers Supply
     SOLD     4,835 sq. ft. commercial building at 1624 Nicholas                                            Building at 14th & Leavenworth Streets.
    LEASED    4,000 sq. ft. office space at 204th & West Dodge Road, to Vincent & Laura Rothe
    LEASED    4,000 sq. ft. commercial space at Eglin Street, Rapid City, to Cellular, Inc.                 By 2009, Creighton Family Medicine along with
     SOLD     4,000 sq. ft. industrial building at 35th & Harlan Lewis Road, Bellevue                       Dr. Goodman, and now four other doctors, will
    LEASED    3,730 sq. ft. office space at 110th and Q Streets, to Midland Computer, Inc.                  be in their fourth expansion of the Old Market
    LEASED    3,672 sq. ft. industrial space at 20th & Harney Streets, to ConAgra Foods, Inc.
     SOLD     3,056 sq. ft. office space at 107th & O Street, to Phys Med                                   Clinic. Because of their growing patient counts
    LEASED    2,937 sq. ft. commercial space at 339 North 78th Street, to Nebraska Cardiac Care, P.C.       and additional providers, Creighton Family
    LEASED    2,883 sq. ft. commercial space at 72nd & Dodge, to Erin McNeal                                Medicine is now making a long term
    LEASED    2,800 sq. ft. industrial space at 90th & Sorensen Parkway, to Jeremy Toubl                    commitment by expanding to fill almost 10,000
    LEASED    2,800 sq. ft. industrial space at 90th & Sorensen Parkway, to Roberts Pool & Spa              square feet in three historical buildings, which
    LEASED    2,800 sq. ft. industrial space at 90th & Sorensen Parkway, to Sparkle Wash of Omaha
    LEASED    2,785 sq. ft. office space at 19th & Harney, to Julia Stommes
                                                                                                            are being combined into one.
    LEASED    2,027 sq. ft. commercial space at 203rd & Roberts, Elkhorn, to Heartland Family Karate
    LEASED    2,017 sq. ft. commercial space at 124th & West Maple Road, to Blonde, Inc.                    Originally constructed in the 1880s and 1920s,
    LEASED    1,690 sq. ft. commercial space at 156th & West Maple Road, to The Art Mill                    these buildings are being retrofitted and when
    LEASED    1,641 sq. ft. office space at 148th & California, to Leo Panzer                               complete will provide a total of 15,000 square
    LEASED    1,609 sq. ft. commercial space at 84th & Park Drive, Ralston, to Chervalier, LLC              feet of office space on the first floor and 12 loft
     SOLD     1,408 sq. ft. industrial building at 44th & Izard
                                                                                                            apartments on the second floor. Still available in
    LEASED    1,357 sq. ft. commercial space at 1851 Madison Avenue, Council Bluffs, to
               Radcliff Enterprises                                                                         the building is a 2,400-square-foot office space.
    LEASED    1,283 sq. ft. office space at 10855 West Dodge Road, to N. Harris Computer Corp.              The site is unique to Downtown Omaha in that it
    LEASED    1,280 sq. ft. commercial space at 108th & Prairie Hills Drive, to Deborah S. deNourie         has 70 on-site parking stalls and 14 garages.
    LEASED    1,279 sq. ft. office space at 90th & Maple Street, to WhettStone Business Solutions, Inc.     Past users include a beer distributor, meat
    LEASED    1,246 sq. ft. office space at 72nd & Halleck Street, Papillion, to Hudson                     wholesaler and bakery supply businesses.
               Neuropsychology Consultants, LLB
    LEASED    1,200 sq. ft. commercial space at 1002-1040 South 74th Plaza, to Jason Murtaugh
    LEASED    1,000 sq. ft. office space at 81st & Maple Street, to Integration & Welfare for Communities   The construction challenges have included
    LEASED    1,000 sq. ft. office space at 81st & Maple Street, to Felicia Hawkins                         some unique activities such as the hydraulic
    LEASED    1,000 sq. ft. office space at 87th & Dodge, to Peterson Brothers Realty, Inc.                 lifting of two stories of columns to straighten the
    LEASED    1,000 sq. ft. office space at 115th & Davenport Street, to PayPlus, LLC                       floors, sawing through 24-inch brick walls and
                                                                                                            tearing down two-story brick walls and
                                                                                                            rebuilding them with recycled brick.

                                                                                                            We are happy to be able to help this important
                                                                                                            service provider to Downtown Omaha expand,
                                                                                                            saving these historical buildings in the process.
                                                                                                            The process involved using historical tax credits,
                                                                                                            Tax Increment Financing and market-rate
                                                                                                            mortgages.

				
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