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AUGUST 2023 VOLUME35 ISSUE4 CRE MARKETPLACE PAGE 40: ASSET/PROPERTY MANAGEMENT FIRMS DEVELOPERS MULTIFAMILY FINANCE REAL ESTATE LAW FIRMS FIRMS
A full stop? Not even high interest rates can do that to Omaha’s CRE market By Dan Rafter, Editor
The Retail District in the Heartwood Preserve development.
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slowdown, not a full stop. That’s how Omaha’s commercial real estate professionals describe the impact of higher interest rates on sales, leasing and development activity in their market.
Omaha has long boasted a resilient commercial real estate sector, one that doesn’t experience the high peaks of some markets but also doesn’t see the low valleys that other cities suffer. And that is holding true today, even as the Federal Reserve Board continues to raise interest rates and inflation keeps slamming consumers. The Federal Reserve raised its key interest rate by 0.25% in late July, increasing this benchmark rate to a target range of 5.25% to 5.5%. The board has been increasing this rate steadily for more than a year to fight persistent inflation. The move marked the Fed’s 11th interest-rate hike in the last 17 months.
David Levy, partner with Omaha law firm Baird Holm, said that higher rates, along with the higher costs of construction, have slowed projects in the city and its suburbs from either starting or reaching fruition. What it hasn’t done is caused developers to scrap these projects completely. “We are still seeing an active commercial real estate market here,” Levy said. “Deals are happening. People are interested in new projects. There is a positive outlook. The interest rate situation and construction costs are maybe slowing things down. But they are not causing projects to stop or not happen.” Two commercial sectors here – industrial and multifamily – are performing especially well today, even with higher interest rates. Levy said that Omaha is seeing an increase in hotel and hospitality projects, too. Technology companies are increasing their activity OMAHA (continued on page 14)
PROPERTY MANAGEMENT
The Foxconn Enphase Energy deal is just more evidence: The Milwaukee area has become an up-andcoming industrial player By Dan Rafter, Editor
Foxconn earlier this summer signed a contract with Enphase Energy to manufacture computer parts for solar power generators at the company’s Mount Pleasant, Wisconsin, campus. This is one example of how companies are looking to the greater Milwaukee area as a destination for a wide variety of manufacturing and industrial uses. MILWAUKEE (continued on page 24)