Omaha leaders in real estate, construction and health care say they're poised for growth this year, though they're approaching business decisions cautiously.
In a panel discussion this week, Mark Seger, executive vice president of CB Richard Ellis Mega of Omaha, Michael “Pete” Piechoski, senior vice president and chief financial officer of Peter Kiewit Sons' Inc., and Corey Watton, chief financial officer of Home Instead Senior Care offered a generally positive outlook on the economy in 2013.
Bank of the West Wealth Management hosted the discussion at Champions Run golf course to offer clients an opportunity to hear perspective from the Omaha-based company executives. Drew Brahos, a California-based market strategist and economist for Bank of the West, served as the moderator.
The discussion touched on general topics ranging from current economic trends in the United States to a post-presidential election economic climate. Each leader's take on what he sees from his industry:
CB Richard Ellis Mega of Omaha
Seger said many sectors in Omaha's real estate climate are strengthening. Office, retail and industrial all showed growth in 2012, and he expects the trend to continue.
“We're seeing a good trend, but we're also seeing that we're just getting back to pre-recession levels,” he said.
In 2006, overall Omaha commercial real estate sales were about a billion dollars, according to CB Richard Ellis Mega of Omaha data, and by 2009 the market bottomed out. That year, overall sales in the city hit a low $250 million.
Last year's numbers show a rebound, Seger said, with the overall Omaha real estate transactions making about $522 million in sales. It compares to a previous 3-year average of about $377 million in commercial transactions.
CB Richard Ellis Mega of Omaha handled more than $330 million in commercial transactions in 2012. The numbers are good news for company hiring because real estate job openings are often contingent on the number of transactions and square footage of transactions made, Seger said.
Apartment sales are expected to strengthen in 2013 because of a growing young population that is veering away from homeownership. Seger said the company saw apartment transactions up 118 percent in 2012 from 2011 levels.
“We're bullish,” he said about positive the trend continuing through the year, “but we're cautiously bullish.”
Peter Kiewit Sons’ Inc.
Piechoski expects Kiewit's revenue to grow up to 5 percent in 2013.
Diversification is the key to the company's success, he said. Kiewit is a more than $11.5 billion company engaged in several markets, from transportation infrastructure and power to vertical buildings and mining,
An uptick in oil, gas and fracking jobs is offsetting the drop off in coal-mining jobs. Piechoski said the vertical building sector is “OK” and major jobs, like the $524.4 million housing job at Offutt Air Force Base near Bellevue, help to bolster that part of the company.
Outside of Omaha, Piechoski said the company has its eye on prospects in Australia and Canada. In Canada, it's common for public and private partnerships to form, which funnel investments from both the government and private investors.
“They seem to be doing quite well with that model,” he said.
Home Instead Senior Care
While changes in health care are throwing a wrench in how some franchisees make hiring decisions, Watton said he's a little more optimistic than most about 2013.
“We have the benefit of 100,000 people turning 65 every day across the globe,” he said. “That's a nice wind to our back.”
Home Instead Inc. is an international franchiser providing caregivers for the aging population, helping to keep senior citizens in their homes. The company has about 900 locations in 16 markets, including the United States, Canada and overseas.
Watton said franchisees that employ about 50 people are particularly concerned about the Affordable Care Act extending health care benefits to all employees if a company has more than 50 workers. Already, about 60 percent of the company's costs are labor costs.
“The No. 1 challenge is finding enough of those employees who want to be trained and wanted to do the work,” he said.
Last year, the company made $1 billion in revenue, a company-first. This year, Watton said, its business development group is active in seeking growth opportunities in Canada and the Pacific Rim.