September 2012

Sales & Leasing

John Dickerson, CPMLee Ehlers, CCIM

Brian FarrellSteve Farrell, CCIM, SIOREmber Grummons, CCIM

John Heine, CCIM, JDJerry Heinrichs, CCIM

Jerry Huber, CCIMTim Kerrigan, CCIM

Brian KuehlMike Moylan, CCIM

RJ Neary, CCIM, SIORJ.P. Raynor, JD

Patrick S. ReganMike Rensch

Clint SeemannKevin J. Stratman

Ryan Zabrowski, CCIM, SIOR

PropertyManagement

Carla Chin, CPMCorreen Harrell

Bruce KleinJeni Sadler, CPM

Jeanette Weber, CPMDebbie Wojcinski

BY TIM KERRIGAN, CCIM

The Omaha office market showed positive absorption

rates for the third consecutive quarter. Omaha’s vacancy rate of 13.6 percent is lower now than it was in January 2008, according to the Xceligent 2012 Second Quarter Report.

In addition to the positive absorption numbers, construction has begun on

BY BRIAN KUEHL

Retail Market space absorp-tion is in the positive figures for the fifth

straight quarter, according to the Xceligent 2012 Second Quarter Report. In the second quarter of 2012, approximate-ly 95,065 square feet were absorbed and several new retailers are planning moves into the Omaha market in the last half of 2012. We expect third quarter to be positive as well.

BY CLINT SEEMANN

Industrial and Flex spaces continue to be absorbed by Omaha’s growing market.

Approximately 49,000 square feet of positive absorption was recorded in the second quarter. Since January, the market has absorbed 374,288 square feet, according to the Xceligent 2012 Second Quarter Report.

Flex space has the highest

STORIES CONTINUED INSIDE

Market Reports ShowSome Improvement

THE OMAHA PROPERTY MARKET HAS SEEN THE NUMBER OF VACANT PROPERTIES SHRINK IN RECENT MONTHS.

THE ABSORPTION RATE IS SLOW, BUT VACANCIES ARE GRADUALLY BECOMING LESS PREVALENT, ACCORDING TO THE 2012 SECOND QUARTER XCELIGENT REPORT. BELOW ARE UPDATES ON THE OMAHA OFFICE, RETAIL AND INDUSTRIAL/FLEX MARKETS ANALYZED BY INVESTORS REALTY BROKERS.

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FIVE QUARTER TREND, NEW RETAILERS FUEL POSITIVE OUTLOOK

SPACE CONTINUES TO BE ABSORBED, BUT CAUTIONS REMAIN

AVAILABLE INDUSTRIAL & FLEX SPACES CONTINUE

THEIR DECLINE

September 2012

Commercial Real Estate

DIGEST402-330-8000

STORIES CONTINUED FROM FRONT

the first new multi-tenant speculative building to be built in four years.

Our optimism remains cautious, however, because there were fewer leases and less square footage leased in the first half of 2012 than in the last half of 2011. One lease in the second quarter of 2012 represented 91 percent of all the absorption. The final caution is the flat rental rates being requested for

Class A buildings, and a decline in the asking

rates for B and C properties.

The total vacancy rate continues to hover around 11 percent. The south central area had the highest absorption rate at 47,503 square feet followed by West Sarpy County at 25,751 square feet. The north central and southwest areas both ex-perienced negative absorption.

The new 42,000-square-foot Hobby Lobby east of the Best Buy at 76th and Dodge Streets, a new 10,000-square-foot Pier 1 at Shadow Lake Town Center, and a 13,000-square-foot Vitamin Cottage Natural Grocers at 175th & West Center are three of the more significant positive changes in the market. Walmart has started construction on their Neighborhood Grocery Markets at 130th & West Maple Road and 25th & Capehart in Sarpy County, as well, with several others planned throughout the market.

In spite of Best Buy’s departure at L Street Marketplace, the small shop space has experienced brisk leasing activity with several new retailers to the market including Kirkland’s Home Décor, The Mattress People and Peachwave Frozen Yogurt.

positive absorption this quarter of 34,760 square feet. The year-to-date leader, however, is distribution at 298,916 square feet of space absorbed.

The Omaha area’s total vacancy continues to decline and is at approximately 5.6 percent. This is the third consecutive quarter the vacancy rate has been reduced. The most notable transac-tions occurring in the second quarter are:• Morton Buildings

40,000 square feet• Industrial Cleaning

32,098 square feet• CR Custom Cabinets

14,000 square feet• Electronic Recyclers

12,083 square feet• Greens Keeper

6,000 square feet

The number of prospects actively looking at new space is low, but we continue to have positive absorption.

Market Reports ShowSome Improvement

Investors Realty, Inc. recently received the contract to manage the Vatterott College building at 11818 I Street. Carla Chin will be the property manager for this 105,000-square-foot building.

IRI TO MANAGE VATTEROTT

COLLEGE BUILDING

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, CPM

TREES, SHRUBS NEED DRINKS

TO SURVIVE DROUGHT

Last year millions of area trees were drowned by Missouri River flooding. This year, the drought also will have wide-ranging consequences for area trees, shrubs, and property owners. While the cost to water trees and shrubs may seem high, the cost to replace a decades-old tree will be much greater.

In addition, losing the shade and esthetics of your landscaping would be equally devastating for your property as well as for your neighborhood.

Local arborists and the Douglas County Extension office provide the following suggestions for saving your landscaping investment:• Lawn sprinkler systems are good for the

lawn but not necessarily for the trees. Irrigation doesn’t always provide adequate water for trees, which benefit from one inch of water a week, all in one sitting. To avoid runoff, experts recommend using a drip system and moving it several times under the canopy of the tree.

• It is important to mulch trees at the base with two to three inches of organic mulch. Mulch keeps the root zone cool and holds in moisture. Don’t pile mulch up against the base of the tree. The mound should look like a bagel when properly placed. The less turf under the tree, the better.

• If you have to replace trees, use native varieties. The trees native to this area, accustomed to periods of drought and most likely to survive are:

1. Bur Oak2. Honey Locust3. Black Locust4. Green Ash

Trees not native to eastern Nebraska and likely to show signs of stress sooner are:

1. Maples2. Pin Oaks3. White Ash

Some trees are showing stress by shedding their leaves early. Trees do this to conserve water.

Don’t fertilize a stressed tree, as that will provide further stress. The best thing to do is to continue to water until the ground freezes, and monitor your trees and shrubs. Consult your local arborist if you see signs of insects and disease. Healthy trees will ward off insects and disease.

Due to the drought, trees will go through a period of stress for the next five years so we may not see the impact right away.

If you lose shrubs and trees this season, according to Extension Service, the best time to plant is in the fall (September-October) when the soil is still warm. The roots will actively grow when temperatures are 50-85 degrees. Once the trees/shrubs are planted, water immediately and continuously using a drip system untilthe ground freezes this winter.

BY JENI SADLER, CPM

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BUR OAKNEBRASKA

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NATIVE MAPLES

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PIN OAKS

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WHITE ASH

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September 2012

Commercial Real Estate

DIGEST402-330-8000

September 2012

Commercial Real Estate

DIGEST

The Nebraska Furniture Mart (NFM) recently purchased the 7400 Building at 7400 Pacific Plaza to house the personnel required to support a new store the Mart is building in Dallas, Texas.

The building, which has been on the market since the beginning of the recession three years ago, was vacant when it was purchased this summer. The 44,000 square foot building will be given an extensive upgrade to house approximately 150 IT and accounting department employees. These employees will support the 550,000 square foot store and 1.2 million square foot Texas warehouse.

The Nebraska Furniture Mart chose the location because of its proximity to the company’s main campus at 72nd and Jones, and will be joined to that campus by a pedestrian bridge over the Papillion Creek. Access to the Papillion Creek trail, and proximity to area amenities were other factors in the buyer’s decision.

In addition to location, other features made the building attractive to the NFM, such as the large skylight system that lets in natural light, creating a pleasant work environment, and a large atrium, which will incorporated into the work environment. The building’s large floor plates will allow for maximum space planning efficiency for employee workspace.

Jerry Huber worked with Ryan Blumkin, great grandson of NFM founder Rose Blumkin,

to execute the transaction. The building was purchased from the Katskee family (LK Company).

NEBRASKA FURNITURE

MART SHUNS TEXAS

TEMPTATION

The U.S. Supreme Court recently upheld the constitutionality of the Affordable Care Act (aka Obamacare). As a result certain taxes will take effect in 2013, unless this law is amended or overturned after the election.

• High-earning workers and those who are self-employed will pay an additional 9 percent hospital insurance tax. The tax applies to wages or self-employment income in excess of: i) $250,000 for joint returns; ii) $125,000 for those who are married and filing returns separately, or; iii) $200,000 for individuals and all others.

• A 3.8 percent surtax will be placed on the lesser of:1) Net investment income, or;

2) The excess of modified adjusted gross income over:

i) $250,000 for married filing jointly;

ii) $200,000 for married filing separately, or;

iii) $125,000 for individual and/or all others.

Certain items, such as tax-exempt bonds, veteran’s benefits, and income from the sale of a personal residence, are excluded from gross income.

In addition, the act sets a higher threshold for deducting medical expenses, places a cap on contributions to health Flexible Spending Accounts (FSA), and sets fees on health plans, among other provisions.

We recommend visiting with your accountant to see how these taxes and fees will impact your accounting, withholding and investment strategies.

AFFORDABLE CARE ACT

IMPACTS TAX PLANNING

JER

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, CCIM

land

buildings

September 2012

WHAT WE’VE DONE LATELY1.2 acres commercial land at East 23rd Street & North Lincoln Avenue, Fremont, to Advanced Auto Parts1.1 acres commercial land at 23rd & Farnam Street, to Arch Icon Development Corporation

65,000 sq. ft. office space at 127th & I Street, to Kiewit Corporation44,328 sq. ft. office building at 74th & Jackson Street, to Nebraska Furniture Mart26,368 sq. ft. office building at Hwy. 370 & Ft. Crook Road, to HCI Real Estate Company16,000 sq. ft. industrial space at 121st & Centennial Road, to MH Equipment Company11,560 sq. ft. industrial space at 136th & Cornhusker Road, to AMAAR Company8,200 sq. ft. commercial space at 84th & West Center Road, to Health Food Associates Inc.7,994 sq. ft. industrial space at 47th & F Street, to Waitt Outdoor, LLC7,580 sq. ft. industrial building at 204th & Park Road, Elkhorn, to Scott Mingus6,000 sq. ft. commercial space at 120th & I Street, to One World Community Health Centers5,400 sq. ft. industrial building at Warren Drive & Race Street, Plattsmouth, to Joe & Shauna Moorhead5,355 sq. ft. commercial space at 90th & Bedford Avenue, to Calvert’s Companies, LLC5,130 sq. ft. commercial space at Bass Pro Drive & Arena Way, Council Bluffs, to Mutual of Omaha LoanPro, LLC5,000 sq. ft. industrial space at 125th & I Street, to Hoich Enterprises Inc.4,402 sq. ft. office space at 116th & West Center Road, to West Center Pediatrics3,484 sq. ft. commercial building at 13th & Park Avenue, to Mosaic Community Development3,370 sq. ft. commercial space at 180th & Harrison Street, to B.A. Management Inc.3,358 sq. ft. industrial space at 94th & G Street, to Multi-Color Corporation3,300 sq. ft. industrial space at 96th & Redick Avenue, to JMS Woodworks, LLC3,250 sq. ft. office space at 115th & Davenport Street, to DKPM Investments Corporation3,240 sq. ft. commercial space at 108th & Q Street, to World of Our Own Enterprises, LLC2,800 sq. ft. industrial space at 90th & Sorensen Parkway, to Andy Mechanic, LLC2,592 sq. ft. commercial space at 108th & Q Street, to Julie Dall Studio of Dance2,580 sq. ft. industrial space at Cornhusker & North Frontier Road, Bellevue, to Brian Torczon2,272 sq. ft. office space at 84th & Hwy. 370, to Midwest Dermatology Clinic2,000 sq. ft. commercial space at 107th & Pacific Street, to Joseph T. Fitzpatrick DDS1,974 sq. ft. commercial space at 15th & Farnam Street, to Harrington Restaurants Inc.1,728 sq. ft. office space at 159th & West Center Road, to Restore Physical Therapy LLC1,700 sq. ft. commercial space at 132nd & Millard Avenue, to Americans for Prosperity1,620 sq. ft. industrial space at 87th & F Street, to Specialized Air & Hydronic Balancing LLC1,502 sq. ft. commercial space at 180th & Q Street, to Omaha Media Group, LLC1,500 sq. ft. office space at 10th & Dodge Street, to Elevate, LLC1,500 sq. ft. industrial space at 90th & Cornhusker Road, to Kenney Property Services, LLC1,296 sq. ft. commercial space at 108th & Q Street, to Motors Central, LLC1,250 sq. ft. industrial space at 90th & Cornhusker Road, to Donald Schincke1,217 sq. ft. commercial space at 120th & Burt Street, to Percutio Inc.1,200 sq. ft. office space at 115th & Davenport Street, to The Rehab Guru Inc.1,165 sq. ft. office space at 74th Plaza & Pacific Street, to Joseph L. Rizzo1,050 sq. ft. office space at 96th & Ida Street, to Saqer Salaman1,050 sq. ft. office space at 98th & Nicholas Street, to CTSR Inc.1,028 sq. ft. office space at 42nd Street & Hwy. 370, to Edward Jones1,000 sq. ft. office space at 81st & Maple Street, to Chuck Huber1,000 sq. ft. office space at Golden Gate Drive & Cedardale Road, Papillion, to Colleen D. Bergren & Ann E. Ebsen1,000 sq. ft. commercial space at 120th & Burt Street, to Campesino Loco, LLC

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KIEWIT LEASES SPACE IN OMAHA WORKS

Kiewit Corporation, the construction company that built the Omaha Works factory and office spaces in the 1950s, is the first company to lease space in the office building at 120th and I Streets, after the facility’s most recent sale to Industrial Realty last year.

RJ Neary and Ryan Zabrowski represented Kiewit as the

construction company searched for space for their central accounting and information technology offices. Kiewit will consolidate accounting services now done at job sites into this central location in Omaha. Approximately 300 employees will move into the location.

“The Omaha Works space is highly efficient,” Zabrowski said. The company will occupy the entire second floor, and will have a reception area, human resource offices and conference room on the first floor.

JP Raynor represented the owners of Omaha Works, Industrial Realty, during the lease negotiations.

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Sept. 2012

Commercial Real Estate

NEW LISTINGSSCAN WITH YOUR MOBILE PHONE TO VIEW OUR LOOPNET PROPERTY SEARCH ENGINE.GET THE FREE MOBILE APP FOR YOUR PHONE AT http://gettag.mobi

TO SEE OUR COMPLETE INVENTORY OF PROPERTIES, VISIT INVESTORSOMAHA.COM

168TH & WEST CENTER ROAD 17110 BuildingOffice/Showroom is currently owner-occupied, owner to relocate. Prominently located on a corner in Lakeside mixed-use development. Many restaurants and services nearby.

77TH AND DODGE STREET 77 Dodge Court37,500 sq. ft. fully leased office building at a great Midtown Dodge Street location. Easy access for employees around Omaha with all retail services for employees and customers near by. Close to three major hospitals. Adjacent to Keystone Trail.

108TH & OLD MILL ROAD Single story, park at your door. Office building located at the entrance to Omni Corporate Park.

11TH & JACKSON STREETA hard-to-find opportunity in the Old Market. Beautiful, brick 5,808 sq. ft. building with architectural glass store front on Jackson St. Long term tenant in place since 2001. Terrific location in busy Old Market District, adjacent to new 10-story Hyatt. Building only for sale.

147TH & WEST MAPLE ROAD9.27 acres in a great location for a new apartment development. Many commercial services and residential areas surrounding this parcel.

114TH & GILES ROAD1.09 to 6.39 acres of level lots result in high efficiency of the land and low site development costs. Almost immediate access to I-80 makes the site quickly accessible. Frontage on Giles makes your business top of mind and easy to find for customers. Positioned among the fastest growing area of greater Omaha equates to appreciation of value for years to come.

72ND & BLONDO STREET Essay Photography Building Affordable building with good rehab potential. Park at your door. New roof. Midtown location.

14TH & HARNEY STREET Paxton Professional Center 9,237 sq. ft. of Class A office space. New construction in 2007 and updated in 2011. 100% leased to single tenant, offered at 8.26% cap rate.

180TH & WEST CENTER ROADDesign your space in this brand new 8,902 sq. ft. office building located right next to the Zorinsky Preserve. Professional environment combined with great views. Park at your door. All amenities close by at Legacy/Lakeside.

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Giles Rd.Giles Rd.

West Maple Rd.West Maple Rd.

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LOT 11.09 acres

LOT 22.91 acres

LOT 32.39 acres

Giles Rd.Giles Rd.

West Maple Rd.West Maple Rd.

114t

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LOT 11.09 acres

LOT 22.91 acres

LOT 32.39 acres

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93RD & F STREET Hi-Park Campus - Building B7,104 sq. ft. of industrial space in a nice campus setting with four drive-in doors, 3,370 sq. ft. of office, a partially air conditioned warehouse area, tractor-trailer accessibility, and easy interstate access. Tenant has furniture, fixtures and a two-year-old phone system for sale. Free rent Incentives!

147TH & WEST DODGE ROAD Seville III 2,601 sq. ft. of office space in a terrific location off West Dodge Road. Single story building allows quick access for employees and clients with abundant parking. Basement storage is available at no additional cost. Extensive landscaping creates a welcoming campus feel.

84TH & HWY. 370, PAPILLION Midlands Professional Centre 3,022 sq. ft. of nicely finished medical space directly north of Midlands Hospital. Move-in ready! Six months free rent on a five-year lease!

84TH & HWY. 370, PAPILLIONMidlands Professional CentreOffice sublease is for the entire third floor—11,702 sq. ft.—and provides for views in every direction. The floor plan consists of an executive conference room, 14 offices, open area and break room. All amenities within five minutes, including Midlands Hospital, Sarpy County Courthouse and Shadow Lake Town Center.

93RD & BURT STREET 2,631 sq. ft. office space on the SE corner of the second floor contains many windows. Very efficient build-out with private offices and open space. Well maintained andmanaged; owner occupied building provides a profes-sional atmosphere. All amenities within the immediate area. Minutes from Dodge Street and I-80.

84TH & HWY. 370, PAPILLIONPapillion Medical Center7,500 sq. ft. well-finished medical office space built to surgical center standards is located directly west of Midlands Hospital. Monument signage available.

147TH & WEST DODGE ROAD Seville V 12,571 sq. ft. office space has attractive build-out that works for many businesses and can be easily modified. This standalone building provides individual identity for a business. Window band and atrium skylight provides maximum natural light for your employees. Dodge corridor location makes it convenient from all areas of the city.

124TH & WEST MAPLE ROAD Tranquility PlaceUp to 3,851 sq. ft. of commercial space with superb visibility. Faces West Maple Road at a lighted intersection and is visible to more than 57,400 cars per day. Signage available facing West Maple Road. Abundant front door parking. Affordable rent.

147TH & WEST DODGE ROAD Seville Square I 545 sq. ft., a rare small office space in West Omaha in a well-established office park with extensive landscaping and campus atmosphere. Park at your door.

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Sept. 2012

Commercial Real Estate

NEW LISTINGSSCAN WITH YOUR MOBILE PHONE TO VIEW OUR LOOPNET PROPERTY SEARCH ENGINE.GET THE FREE MOBILE APP FOR YOUR PHONE AT http://gettag.mobi

TO SEE OUR COMPLETE INVENTORY OF PROPERTIES, VISIT INVESTORSOMAHA.COM

140TH & CORNHUSKER ROAD Destiny One 15,300 sq. ft. industrial space with a nice office build-out including a conference room, kitchen, break room, and reception. Large warehouse area with dock doors and levelers. Excellent I-80 signage opportunity. Located in the Valley Ridge Industrial Park, southeast of Highway 50 & I-80.

108TH & HARRISON STREET Brook Valley 1418,600 sq. ft. of office/showroom areas in a clean, well maintained, industrial warehouse in La Vista. Access to 1-80 within minutes.

78TH & HARRISON STREET2,643 sq. ft. of commercial space with a new, clean interior finish in a professionally managed shopping center. Economical rates and flexible layout.

120TH & GILES ROAD Centennial Warehouse4,000 sq. ft. industrial space with oversized drive-in doors and dock doors with levelers. This space has halogen lighting and floor drains. Well-maintained, professionally managed property. Located in the Papio Valley 2 Business Park in La Vista with excellent access to I-80.

84TH & HWY. 370, PAPILLION Golden Gate1,600 sq. ft. of newly renovated, economical, commercial space ready for immediate occupancy. Near Shadow Lake Towne Center and a busy intersection with nearly 50,000 cars per day.

140TH & OLD L STREET2,250 sq. ft. industrial/flex space with oversized drive-in door with electric opener, mezzanine storage, and floor drain.

96TH & GILES ROAD One Val Verde Place 98TH & GILES ROAD One Giles Place Join Children’s Physicians, Domino’s Pizza, MetLife Bank, State Farm Insurance, ReMax Real Estate and many others in this attractive retail development. Choose from former restaurant space, suites suitable for all uses, or new space to fit your specific needs. Ample parking for tenant employees and customers.

169TH & FRANCES ST. Ervin & Smith Building2,147 sq. ft. office space in this attractive, brick, owner-occupied office building with abundant windows. Located in Lakeside Office Park which is easily accessible via West Center Road. Over seven million square feet of retail space within one mile for all amenities, including shopping and dining. Lakeside walking trail is adjacent to property.

168TH & WEST CENTER ROAD2,000 to 8,000 sq. ft. is available in this single story medical building. Design your own floor plan and park at your front door. Join other medical providers in the immediate Lakeside area.

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