OMAHA—When the economic recovery first gathered steam, demand accelerated in gateway markets like New York and in cities dependent on technology or energy such as San Francisco, Denver and Houston. But in the past several quarters, the recovery has broadened and sunk roots into metro areas across the country, especially in the Midwest. Omaha, for example, has seen increased demand in both office and industrial sectors, according to new research on the second quarter just published by Xceligent.

In addition to hosting long-time corporate tenants like Union Pacific and Berkshire Hathaway, the city has seen the same demographic shifts that have brought thousands of younger people and families into CBDs across the Midwest. Multifamily developments have sprouted up, alongside more entertainment options such as a new baseball stadium and an arts center. All this has made it more attractive to office users.

“The Omaha office market experienced its sixth straight quarter with positive absorption,” Xceligent's researchers note. The market saw 184,525-square-feet of positive absorption, which brought its total over the past year to 496,874-square-feet. As a result, in the past year the vacancy rate has dropped from 13.5% to just 11.5%.

Class A properties have fared exceptionally well, with 195,140-square-feet of absorption for the quarter. The strong demand pushed the class A vacancy steadily down from 6.0% last year to just 3.8%. Over the past year the class A market has had 445,001-square-feet of positive absorption, and in the past five quarters asking rates have increased 4.5%.

Industrial property also had a great quarter and a great year, according to Xceligent. “The market experienced more than 762,118-square-feet of positive absorption for the quarter,” the researchers note. “Over the past year the market has experienced nearly 1.4-million-square-feet of absorption.”

Last year, the vacancy rate for industrial facilities was just 4.6%, but by the second quarter had fallen even further, to just 3.3%, and asking rates have increased 6% since 2013. The Southwest submarket saw the most activity, with 615,918-square-feet absorbed. Its vacancy rate fell from 14.6% earlier this year to just 7.2%.

“The majority of the absorption for the quarter can be attributed to a confidential tenant leasing 650,000-square-feet at 12500 I St.,” Xceligent notes. “The landlord was represented by Investors Realty, Inc. while the tenant was represented CBRE Mega.”