2 office moves latest in downtown Omaha's awakening

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Posted: Sunday, July 14, 2013 12:00 am

Two Omaha firms — COR Clearing and a division of Berkshire Hathaway Homestate Cos. — are moving employees downtown, filling up chunks of vacant office space in the city's core.

The two leases, which total about 50,000 square feet, should further boost the occupancy rate in the downtown office market, which nudged up to nearly 90 percent this past quarter.

Commercial real estate brokers said the activity reflects an awakening in downtown.

“I don't think resurgence is too strong of a word,” said T.J. Twitt of the Lund Co., who worked on the two transactions and has another pending downtown deal of 15,000 square feet.

J.P. Raynor of Investors Realty said the downtown market has benefited also from the conversion of deteriorated office buildings into trendy apartments, as well as key purchases or leases of vacant space. He cited, for instance, KETV's decision to buy and rehabilitate the old Burlington Station.

Raynor said a client is on the lookout for up to 100,000 square feet upon which to build and is focusing on downtown. His Investors Realty team, he said, is tracking 30 potential tenants searching for a total of up to 850,000 square feet in Omaha.

Those deals, if successful, will be a contrast to “less than stellar” results of the last few months in the overall Omaha office market, Raynor said.

While the number of transactions involving more than 1,000 square feet of office space was up 34 percent during the first half of this year, compared with the same time last year, the amount of space filled was down about 20 percent, according to Investor Realty's midyear report.

Throughout Omaha, the vacancy rate worsened from 13.9 percent a year ago to 14.3 percent.

Downtown, the vacancy rate rose from 9.1 percent a year ago to 10.5 percent. But it did improve over the 2013 first quarter's 11.5 percent, according to an office space update by Xceligent.

The recent leasing activity by COR Clearing LLC and the Homestate division portend better results in the third quarter.

The Berkshire Hathaway Homestate Insurance Co. has signed a lease to occupy one floor of The World-Herald Building, about 27,000 square feet, the Omaha World-Herald Co. has confirmed.

A Homestate spokeswoman said she was not authorized to provide information on the move, including whether all or part of its workers' compensation operation in Omaha will relocate from the midtown campus.

Berkshire Hathaway Homestate Cos. is a group of six insurance companies that are part of Omaha-based Berkshire Hathaway's insurance group. The workers' compensation division provides workers' compensation insurance coverage to employers across the country, with offices in Omaha as well as San Francisco, San Diego, Atlanta and Dallas.

COR Clearing, a securities clearing firm, plans to relocate 104 employees by fall from its west Omaha home to a 20,000-square-foot area of the 1200 Landmark Center at 13th and Farnam Streets.

The move is driven by the company's growth. COR carries out purchases and sales of securities for about 90 broker dealers and is about to add 10 more, said Carlos Salas, president of COR Clearing.

The company website says it holds assets in custody exceeding $5 billion.

Its future downtown quarters are in a facility that offers room for further expansion. Salas said he expects to continue to grow at the current pace.

“We've placed a bet on Omaha,” Salas said. “When we purchased the company we evaluated several different places to invest in, including Chicago and New Jersey, and decided that Omaha had the most advantages.”

COR Clearing began as part of Mutual of Omaha and evolved into Legent Clearing. In 2011, Legent was acquired by COR Securities Holdings Inc., and in 2012 became COR Clearing LLC.

When COR Securities bought Legent, the company had 83 employees, Salas said, about 70 of whom were based in Omaha. Over the past year, he said, the Chicago and Tampa, Fla., offices were consolidated into the Omaha headquarters in anticipation of the relocation downtown.

The company currently is advertising for employees, including accounting positions and technology experts.

“About 10 years ago, this type of work processing securities and transactions was highly manual but has shifted very much more toward technology systems and software,” Salas said.

Yet business has grown to the point of requiring even more people, he said.

Salas said downtown is where the company wants to be.

Omaha, he said, offers a friendly atmosphere and a “highly educated, hard-working” population. He said executives liked the downtown site's proximity to the convention center, hotels and airport.

“We wanted a premier office space that projected a professional environment,” he said. “It is a beautiful space in a picturesque setting.”

The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.

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