MARKET DEMAND AND ANALYSIS FOR THE GREATER OMAHA / COUNCIL BLUFFS - - PowerPoint PPT Presentation

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MARKET DEMAND AND ANALYSIS FOR THE GREATER OMAHA / COUNCIL BLUFFS - - PowerPoint PPT Presentation

Nov 05, 2022 311 likes •508 views

INDUSTRIAL DEVELOPMENT MARKET DEMAND AND ANALYSIS FOR THE GREATER OMAHA / COUNCIL BLUFFS REGION November 2017 Project Steering Committee Cheryl Brandenburgh Trudy Johannsen Black Hills Energy Corporation MidAmerican Energy

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SLIDE 1

INDUSTRIAL DEVELOPMENT

MARKET DEMAND AND ANALYSIS

FOR THE GREATER OMAHA / COUNCIL BLUFFS REGION November 2017

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SLIDE 2

Project Steering Committee

  • Trudy Johannsen
  • MidAmerican Energy Company
  • Devin Meisinger
  • Omaha Public Power District (OPPD)
  • Andrew Rainbolt
  • Sarpy County Economic Development

Corporation

  • Lisa Scheve
  • Gateway Development Corporation
  • Jennifer Serkiz
  • Cass County Economic Development

Corporation

  • Mark Norman
  • Greater Omaha Chamber
  • Cheryl Brandenburgh
  • Black Hills Energy Corporation
  • James Caraway
  • Sarpy County Economic Development

Corporation

  • Bruce Fountain
  • County of Sarpy County
  • Don Gross
  • Metropolitan Area Planning Agency (MAPA)
  • Cecilia Harry
  • Greater Fremont Development Council
  • Paula Hazelwood
  • Advance Southwest Iowa
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SLIDE 3

Scope of Study

  • Comparison of the greater Omaha metro region’s

industrial inventory to the following comparable markets:

  • Des Moines, IA
  • Oklahoma City, OK
  • Memphis, TN
  • Salt Lake City, UT
  • Columbus, OH
  • Kansas City, MO/KS
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SLIDE 4

Omaha MSA – Industrial Building Availability

Market Size (sq. ft.) Average Asking Cost / Square Foot YTD Absorption (sq. ft.) Vacancy Rate Deliveries (sq. ft.) Q4 2016 68,291,937 $5.27 410,472 3.2% 548,405 Q2 2016 68,638,408 $5.11 22,811 3.1% 238,900 Q4 2015 68,372,811 $4.72 470,568 3.0% 197,410 Q2 2015 68,222,531 $4.53 32,668 2.9% 305,663 Q4 2014 68,152,586 $4.26 1,400,000 3.0% 534,484 Q2 2014 68,035,144 $4.28 1,011,807 3.3% 12,800

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SLIDE 5

$‐ $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 Omaha, NE Des Moines, IA Oklahoma City, OK Memphis, TN Salt Lake City, UT Columbus, OH Kansas City, MO

Price/Square Foot Community

Historical Average Asking Price PSF – All Tranches

Q4 2016 Q2 2016 Q4 2015 Q2 2015

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SLIDE 6

‐ 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 Omaha, NE Des Moines, IA Oklahoma City, OK Memphis, TN Salt Lake City, UT Columbus, OH Kansas City, MO

Square Foot Community

Deliveries

Q4 2016 Q2 2016 Q4 2015 Q2 2015 Q4 2014 Q2 2014

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SLIDE 7

0.90% 2.17% 4.41% 1.04% 2.72% 1.21% 1.35% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00% Omaha Des Moines OK City Memphis Salt Lake Columbus Kansas City

Deliveries by Percent of Market Size 2014‐2016

Average Annual Deliveries Average Annual Deliveries Competitor Markets

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SLIDE 8

(1,000,000) ‐ 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000 10,000,000 Omaha, NE Des Moines, IA Oklahoma City, OK Memphis, TN Salt Lake City, UT Columbus, OH Kansas City, MO

Absorption ‐ Sq. Ft. Community

Absorption (sq. ft.)

Q4 2016 Q2 2016 Q4 2015 Q2 2015 Q4 2014 Q2 2014

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SLIDE 9

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% Omaha Des Moines Oklahoma Memphis Salt Lake City Columbus Kansas City

Percent MSA

Vacancy Rates

Q4 2016 Q2 2016 Q4 2015 Q2 2015 Q4 2014 Q2 2014

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SLIDE 10

Development Trajectory

  • Not all encompassing of need
  • Based upon historical demand
  • Can be vastly improved with development of

business case

  • Evidence of demand often follows inventory
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SLIDE 11

68,292 538,556 5,296,323 1,391,791 4,652,709 2,489,940 633,445 205,081 1,631,879 16,208,866 4,259,437 14,239,151 7,544,767 1,909,852 ‐ 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 Omaha Des Moines Kansas City Oklahoma City Memphis Columbus Salt Lake City

Square Feet Community

Projected Square Footage Needed ‐ Low Growth Based on Total Market SF Growth

Projected 2017 Projected 2018 Projected 2019

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SLIDE 12

682,919 1,615,669 10,592,646 2,783,582 9,305,418 7,469,820 2,533,779 2,069,314 4,993,871 33,066,003 8,689,230 29,047,794 23,088,466 7,754,378 ‐ 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 Omaha Des Moines Kansas City Oklahoma City Memphis Columbus Salt Lake City

Square Feet Community

Projected Square Footage Needed ‐ High Growth Based on Historical Market SF Growth

Projected 2017 Projected 2018 Projected 2019

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SLIDE 13

(856,191) 7,869 1,570,134 (2,573,853) 725,857 (2,341,512) (2,110,732) (3,000,000) (2,000,000) (1,000,000) ‐ 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 Omaha Des Moines OK City Memphis Salt Lake Columbus Kansas City

Annual Lost Opportunity Gap by Average Deliveries (by % of Market) Square Feet – 2014‐2016

Avg Annual SF Growth Growth Expected by Avg Comp Delivery Growth Gap (Expected Comp Delivery ‐ Local Avg Delivery)

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SLIDE 14

(1,522,290) (281,141) (11,142) 434,838 (1,422,901) 324,930 959,981 (2,000,000) (1,000,000) ‐ 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 Omaha Des Moines OK City Memphis Salt Lake Columbus Kansas City

Annual Lost Opportunity Gap by Market Growth (by % of Market) Square Feet ‐ 2014‐2016

Average Annual Growth in Market Size Annual Growth Expected by Avg Comp Growth Gap (Avg Market Growth by Comp ‐ Local Growth)

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SLIDE 15

(395,988) (242,727) 444,439 (1,696,017) (108,530) 858,049 118,795 (3,000,000) (2,000,000) (1,000,000) ‐ 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 Omaha Des Moines OK City Memphis Salt Lake Columbus Kansas City

Annual Lost Opportunity Gap by Absorption (by % of Market) Square Feet ‐ 2014‐2016

Average Annual Absorption Growth Expected by Avg Competitor Absorption Gap (Avg Annual Absorption ‐ Avg Comp Absorption)

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SLIDE 16

Lost Opportunity

  • Lost Opportunity Greater Omaha 2014-2016
  • Average Annual Deliveries of 612,000 SF
  • Annually between 400,000 to 1,500,000 SF lost
  • pportunity based on competitor averages
  • Based on 40% Building to Land Ratio

» Between 70 and 250 Acres Lost Between 2014-2016

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SLIDE 17

Improving Trajectory

  • Identified buildings to meet market demand
  • Shovel-ready, controlled site availability suited to targeted

uses

  • Proactive marketing of verticals suited to the local market
  • Multi-jurisdictional cooperation on infrastructure off-site

extensions and capacities upgrades

  • Rapid entitlement process
  • Land concessions or applicable incentives availability
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SLIDE 18

Where Do We Go From Here?

  • GO Ready Sites

– Good Momentum, Keep it Going!

  • Mega-Site Task Force

– Identify and Pursue Development Strategies for Large Sites

  • Finance Task Force

– Identify New & Innovative Tools – How to Lower Risk for Developers

  • Seeing Increased Speculative Interest

– R&R Development – White Lotus Development – Others