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Written by Tom Darcy and Brad Soderwall, Hines
The Omaha market has experienced strong growth in recent years, with $8 billion in commercial real estate development currently underway due to the continued migration of new residents and professionals to the area.
The city’s appeal is primarily due to its high quality of life and attractive cost of living, both of which provide attractive opportunities for new development, further encouraging migration and making Omaha a desirable location. foster and enhance a unique lifestyle. For families and young professionals to put down roots.
Tom Darcy, Hines
Demographic changes drive Omaha’s growth
Omaha’s low unemployment rate (2.6 percent as of July 2024, according to the Nebraska Department of Labor), quality of life, affordable cost of living, and expanding cultural opportunities are driving people to move to the area. According to the U.S. Census Bureau, the Omaha-Council Bluffs metropolitan area will record its strongest population growth since pre-pandemic (2019) in 2023, increasing by 0.8%, well above the national average of 0.5%. In 2023, the net migration of residents to the region exceeded 3,400.
This population growth is fueling demand in the multifamily market, with 2023 expected to be a record development year for the city, with nearly 3,000 new units added, according to CoStar. Across Hines’ multifamily portfolio, it is estimated that 30 to 40 percent of applicants come from out of state, attracted by a robust job market across a variety of industries, particularly healthcare, and these new Many of the residents are educated Gen Zers and Millennials in their 20s. Until the age of 40. Additionally, more graduates from surrounding universities are choosing to remain in the Omaha area, and more are leaving the city and returning to benefit from its economic and cultural growth.
Brad Soderwall, Hines
This increased demand for higher quality housing, restaurants, arts and entertainment venues, and also supported the city’s downtown office market. For example, insurance giant Mutual of Omaha is building an 800,000-square-foot skyscraper to house its corporate headquarters with office, meeting, and amenity space. New parks and landscaping, an influx of retail stores, and a high walkability score make downtown Omaha attractive to residents and employers alike.
Additionally, Hines and leading design firm Perkins & Will were recently named development and design consultants for Alliance Sports’ 18-acre mixed-use development. The development includes Union Omaha’s 7,000-seat soccer stadium and enhances the vibrant and dynamic community of the downtown area. Sports-focused developments like this have been shown to drive strong growth in other markets, and this project is expected to have a similar impact on downtown Omaha.
Strong demand for high-quality, well-equipped living spaces
As our population continues to grow, we are seeing a growing need for new housing options throughout the city, especially in high-demand neighborhoods like Elkhorn and Papillion-La Vista, that create quality, well-appointed, and curated living experiences. I understand. The same goes for downtown, where Hines Brickline at the Mercantile is located.
In addition to increasing rental activity in northwest Omaha, MMG Real Estate Advisors also has large-scale operations focused on seven desirable submarkets, including Midtown, Elkhorn, Papillion-La Vista, Downtown, Northwest, Central, and Bellevue. It also noted the concentration of new construction activity. Residents are increasingly demanding high-end finishes and appliances, as well as wellness spaces and areas that allow them to play and socialize, and many of the new products coming to market are aimed at meeting these needs. Masu.
In addition to traditional residential spaces serving working-age residents, Omaha’s senior living communities are aging and outdated. Few, if any, meet the modern needs of older people. Currently, 10 percent of Omaha’s population is over the age of 70, and an additional 21 percent of residents are in the 50 to 69 age group, according to the census.
As the baby boomer generation continues to age, it is no surprise that cities are expected to place an increased burden on senior housing facilities, and now is the time to ensure that this age group has access to quality housing. Now is the time to start revitalizing and adding to our senior housing stock so we can do more. – The quality living experience and hospitality services they expect.
Public policy supports growth and development
Omaha’s local officials have been very supportive and continue to encourage development throughout the city, recognizing that this activity has significant benefits for Omaha’s long-term growth. As with Alliance Sports Stadium and adjacent developments, it is hoped that thoughtfully planned spaces that respond to local needs will move the city forward. Omaha City Council approved $129 million in tax increment financing for 23 development projects estimated to generate $1 billion in mixed-use, residential and industrial investment citywide in 2023 alone.
Optimism among public and private stakeholders in the Omaha market remains strong, and the region’s budding cultural scene, low crime rate, strong job market, and affordable cost of living position the Omaha MSA as a long-term value for strategic investors. It has become an attractive area. It offers a variety of benefits to new and old residents.
Tom D’Arcy is a senior managing director and Brad Soderwall is a managing director at Hines. This article was originally published in the October 2024 issue of Heartland Real Estate Business magazine.
