OMAHA -- Four years ago, farmland occupied much of the area south of Nebraska 370 between Interstate 80 and Nebraska 50.
Today the area is home to four warehouses totaling 1.1 million square feet of in-demand industrial space. Known as Commerce Park, it represents the beginning of what might be the largest speculative industrial development in the Omaha region’s recent history.
R&R Realty Group, the West Des Moines-based real estate firm that owns Commerce Park, recently announced plans to build six new warehouses, totaling over 1.3 million square feet spread across 100 acres. Because of its location on the southeast corner of 156th Street and Schram Road, the planned development has been dubbed Commerce Park South.
With north and south combined, Commerce Park will measure about 2.4 million square feet of industrial space, which nationally has been in short supply and seen rising rent rates.
Much like the north development, which sits on 80 acres, the warehouses to the south will be built in a speculative manner — ready to serve the needs of nearly any company that requires mainly storage and distribution space.
The spec warehouses collectively help fill a need in an area where the interstate and two highways are practically a stone’s throw away, said Mike Homa, president of R&R Realty Group’s Nebraska division.
“There was just no inventory of large distribution warehouse-type buildings available,†Homa said.
Homa said construction is projected to start on the first Commerce Park South warehouse in April, with specialty grading of the land being one of the first steps.
Two Commerce Park South warehouses are projected to be built by the end of this year.
While there is no tax-increment financing involved in the Commerce Park development, City of Papillion spokesman Trenton Albers said a sanitary and improvement district has been created for Commerce Park South. An SID can issue bonds and levy taxes and special assessments to allow for construction of public infrastructure such as roads.
The development will have approximately $5 million in general obligation debt — the amount of public infrastructure costs that will be publicly financed through property taxes, Albers said.
According to the Greater Omaha Chamber, the Commerce Park warehouses most likely represent the biggest speculative industrial development in recent history.
“It’s a major trend we’re seeing,†said Andrew Rainbolt, executive director of Grow Sarpy, an economic development partner of the Omaha Chamber. “We’ve got a lot of interest from spec developers, which is a complete flip from where we were four or five years ago when we were kind of trying to beg spec developers to come and build in our area.â€
What helped spur development, Rainbolt said, was the increase in rent per square foot. Previously, the rent per square foot was $4. Now rent is valued at about $6 per square foot, which means a better return on investment for developers.
For Fat Brain Toys, Commerce Park’s warehouse sizes and proximity to major roadways led the Omaha company to relocate its distribution center in October. Co-founder and president Mark Carson said the expanding company moved into the space to maximize efficiency in operations and distribution. Previously, Fat Brain Toys had two separate warehouses.
“By moving to a larger, consolidated space, we solved two needs at once,†he said.
An employee works in the Fat Brain Toys warehouse at Commerce Park, 14620 Gold Coast Road, in late January. The warehouse in Sarpy County is owned by R&R Realty Group.
Spencer Shireman (from left), Mike Homa and Cooper Wilson pose for a portrait in a warehouse at Commerce Park, which is owned by R&R Realty Group. R&R is nearing completion of a fourth warehouse at Commerce Park.