The final piece of the $205 million Capitol District project has launched — and the new glassy office structure featuring rooftop decks is being held out as a sign of confidence in downtown job growth.
Slated to be done by mid-2020, the three-story building will contain nearly 47,000 square feet and is rising as a speculative project, meaning there are no secured office tenants. Investors, rather, are counting on the old adage: Build it and they will come.
“We’re at the point, as a city and as a downtown, that there is enough interest for a developer to spec an office building — which is cool,” said Steve Sheppard, of CBRE/Mega Real Estate.
Sheppard and Ryan Ellis of PJ Morgan Real Estate, who are teaming up as the office project’s leasing agents, said they can’t remember the last time another office building was constructed in downtown without an anchor tenant first being on board.
Indeed, most of the metro area’s new office space in recent years has gone up in suburban areas. Of about 15 office buildings that trend-watcher CoStar Group tracks as under construction this year in Omaha, only one is in downtown. That list, though, didn’t include the future Kiewit Corp. campus, which is in progress in north downtown.
Faith in the downtown office market is driven in part by ongoing landscape improvements, including riverfront revitalization efforts and the remake of the Gene Leahy Mall. Sheppard and Ellis say young talent wants to live in active urban areas, and companies increasingly are seeking ways to tap that demographic group.
“The younger workforce wants amenities,” Ellis said. “They want to be able to walk to lunch, to happy hour after work. It makes sense to have real estate closer to them.”
He and Sheppard also tout convenient and ample parking, saying that tenants of the new Offices at the Capitol District would have parking space equal to office complexes in the suburbs.
They cite accessibility to Eppley Airfield, the Interstate and public transit options. They also point to the office building’s location within the entertainment-focused Capitol District, which hosts various outdoor events and programs throughout the year including concerts and classic movie nights.
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As of today, about 75% of the retail space in the Capitol District redevelopment site is occupied, said Mike Moylan of Shamrock Development, which led the overall project. The first floor of the new office building also is to be retail space, he said.
Of the dozen businesses around the district’s outdoor plaza, the newest are Epoca Cantina and the Jewell jazz club. Retailers also include a coffee shop, pizzeria, steakhouse and themed bars.
When completed, the new office building will line the southern border of the Capitol District redevelopment project site. Along 10th Street north of Capitol Avenue is a full-service Marriott Hotel. A 218-unit high-rise apartment structure runs along 11th Street, and a parking garage and a row of retail bays are on the project site’s northern side.
Those major pieces of the Capitol District project surround the football field-sized outdoor plaza area that is dotted with tables and has a big-screen TV. The social area, which can fit 1,500 to 2,000 people, is just outside the doors of the future Offices at the Capitol District.
First envisioned in 2011, the Capitol District redevelopment project was spearheaded by Moylan’s Shamrock Development and principal investor Paul Smith. Smith also is behind the Millwork Commons, an effort to create a high-tech job hub in north downtown.
Shamrock was picked over two competing bidders to develop the city-owned tract. At the time, Shamrock already had a footprint at the 10th and Capitol area, having redeveloped the 1009 Capitol Building and 1000 Dodge Building into condos and bars. The developer had started to market the neighborhood, which includes other venues such as DJ’s Dugout, as the Capitol District.
Progress was slowed early on as the development team worked to find a hotelier willing to open a full-service facility, and to obtain financing. Disappointment struck when Omaha-based HDR engineering and architectural firm switched its previous plan to build a new corporate headquarters just south of the Capitol District project, instead making its new home for about 1,000 workers at central Omaha’s Aksarben Village.
Moylan, who has developed multiple other sites in downtown, said he is thrilled to see construction work start at the dirt hole that had been cordoned off along Capitol Avenue.
“We always knew it would be a staged development,” he said of the overall initiative. “To have the last and final building under construction is extremely exciting.”