Brokerage Outlook: Nebraska

• Omaha Retail

• Metro Omaha Office

Omaha Retail Secor Submitted by Rich Secor, vice president with the Omaha, Nebraska, office of The Lund Company/TCN Worldwide. Posted 3-29-06. What area is your expertise? • Omaha, Nebraska What trends do you see presently in retail development in your area? • The Omaha retail market continues to be very strong, particularly among anchored strip centers, despite increasing space availability. Overall, anchored strip center space availability continues to approximate 5 percent. However, space availability has increased 5 percent from 454,100 square feet to 478,500 square feet since May 1, 2005. Medium shop space (5,000-9,999 square feet) has decreased 15 percent. What retailers are new to your area? • Whole Foods Market recently opened its store at the former Burlington Coat Factory Building at the southwest corner of 102nd and West Dodge Road. Who are the active retail developers in your area? • Hy-Vee recently announced its plans to open a store at Papillion Promenade at 72nd and Highway 370. Wal-Mart Supercenter recently opened at the northwest corner of 168th and West Maple Road; has begun building its store at Papillion Marketplace at the southeast corner of 72nd and Giles Road; and has announced plans for a store to be located at the former Ranch Bowl site at the northwest corner of 72nd and Hickory streets. All three of these sites are centered among Omaha's most vibrant retail districts. Please name one or two significant retail developments in your area. What impact will these projects have on the market? • Construction is well underway on three major projects. Sorenson Park Plaza, located at the norhteast corner of 72nd and Sorenson Parkway, for example, ultimately will contain 600,000 square feet. The following anchors have been announced: Target, Great Escape Movie Theatre, Linens 'n Things, Marshalls, OfficeMax, PetsMart and Factory Card Outlet. Major site work continues on Papillion Promenade at the southwest corner of 72nd and Highway 370. Anchors for the eventual 900,000-square-foot project thus far include: Hy-Vee, Best Buy, Bed Bath & Beyond, T.J. Maxx and PetsMart. Where is the majority of development taking place? Why is this area doing well? • Lowe's Home Improvement Warehouse will anchor the approximately 700,000-square-foot lifestyle center to be built east of Starwood Plaza at Interstate 680 and Irvington Road. The center will be known as Market Square. In addition, a local developer is planning to develop an approximately 467,000-square-foot power center at the northwest corner of 120th and L streets. Major anchors are being actively solicited. What area do you expect to be the next big retail development market? Why? • The Sarpy County submarket is the next big retail development with Market Pointe, a Wal-Mart Supercenter-driven project, and Shadow Lake, a 680,000-square-foot project located down the street from Market Pointe. These developments will meet the growing customer needs in the Sarpy County area. Please describe the retail leasing activity in your area. click here to view space availability chart 1 click here to view space availability chart 2 • Retail leasing continues to be very active with the planned additions of three major projects: Papillion Promenade, The Shoppes at Market Pointe and Sorenson Parkway Plaza. Please give a measure of retail vacancy rates. Please give a measure of available sublease space. • Overall, Omaha's retail vacancy continues to approximate 5 percent. A variance can be seen in the Central and Northwest submarkets with vacancy rates of 9 percent and 7 percent, respectively. All other submarkets are at 5 percent or below. Sublease space continues to vary in respect to business growth and expansion needs. What types of retailers should look into your market in the coming year? What type of retail is needed? • The announced retail developments have currently secured Hy-Vee, Bed Bath & Beyond, T.J. Maxx, PetsMart, Best Buy and several other retailers that are expanding in the Omaha area. Additional tenants similar to Village Pointe are being pursued to fill out additional lease space.

Metro Omaha Office Secor Submitted by Rich Secor, vice president with the Omaha, Nebraska, office of The Lund Company/TCN Worldwide. Posted 3-30-06. What area is your expertise? • The area being discussed is the Omaha, Nebraska, metropolitan area. What trends do you see presently in office development in your area? • Overall office space availability has decreased from 17 percent to 15 percent during the past 6-month period. The 15 percent space availability factor represents approximately 2.2 million square feet of available space throughout the approximate 14.6 million-square-foot, non owner-occupied office market. The decrease of available office space in the market is mainly attributed to space absorption among large and small users of space. Who are the active office developers in your area? • Cizek, Lockheed Martin, Walnut Grove Professional Plaza, North Park 4B and Trailside Plaza are all active office developers in the area. Please name one or two significant office developments in your area. What impact will these projects have on the market? • In Bellevue/Sarpy County, construction is nearing completion on the approximately 85,000-square-foot Lockheed Martin Office Building at 42nd Street and Highway 370. The Building is 100 percent pre-leased. In the central northwest submarket, the 40,000-square-foot North Park 4B at 11819 Miami Street is under construction. Where is the majority of development taking place? Why is this area doing well? click here to view current construction chart click here to view planned construction chart • As residential areas expand to the west, this area accounts for 66 percent of current construction activity. What area do you expect to be the next big development market? Why? • Active planned construction, representing projects that have not had groundbreaking as of January 1, 2006, but are highly likely to be built, constitutes approximately 777,800 square feet of office space scheduled to come on line within the next 18-48 months. The suburban West Dodge Road corridor has 216,000 square feet planned, which represents 28 percent of the entire market. In addition, the suburban southwest submarket accounts for 174,600 square feet, or 22 percent, of what's planned. The Omaha market continues to expand due to new business development and existing business growth. What areas are doing well in terms of office leasing? Which areas are struggling with office leasing? click here to view space availability chart • For the first time in several years, the space availability factor in the downtown/midtown and the suburban markets almost match one another. Current space availability in the downtown/midtown market is 16 percent and in the suburban market, 15 percent. There are several notable space absorption transactions among large and small users of space that, when coupled with the conversion of many former office buildings to residential condominium units, have depleted the excess inventory of space in downtown/midtown. Please give a measure of office vacancy rates. Please give a measure of available sublease space. • Overall office space availability in Omaha decreased from 17 percent to 15 percent. The amount of sublease space in the market is insignificant, comprising just approximately 41,500 square feet of approximately 2 percent of all available space in the market. What impact do current interest rates have on the office market? What predictions do you have for interest rates and their effect on the office market in 2006? • Due to the current low interest rates, the office market in Omaha will continue to experience favorable growth for 2006. What is the status of job growth/(un)employment rates and what bearing will it have on the office market? • As the office market continues to experience the expansion of existing businesses and the opening of new offices, the job market will continue to grow. Is there any type of office tenant absorbing a majority of space? What industries do you expect to expand in 2006 to absorb a great deal of office space? • In the suburban submarkets, defense contractors (due to the nearby Offutt Air Force Base), financial services and call centers absorb a majority of the space and will continue to do so throughout 2006. Would you like to make any additional observations about the office market in your area? • While the trend of rental rates in all classes of office buildings had been declining for the past couple of years, it now appears that they have stabilized. Concessions, including rent abatement, additional tenant leasehold improvement allowances and/or moving allowances, appear to have stabilized as well.