The Commercial Real Estate (CRE) Summit held its annual conference on the 26th of August, to massive success. Held at the CHI Health Center, it focused on the changing market in the aftermath of the pandemic, and what effects it has had on commercial real estate as a whole. The event ran from 8:20am-3:05pm, with cocktails at The Capital District after. The Daily Record sent Kai Van Ginkel to the event to give highlights of the speeches. There were multiple speeches that were conducted at the same time, so our reporter was not able to attend each one.

“The Changing World of the Economy”

Opening remarks were given by Dr. Ernie Goss, Professor of Economics at Creighton University, the Jack A. MacAllister Chair in Regional Economics, and Director of the Institute for Economic Inquiry. He gave a statistical overview of where we as a country sit with the current market. He stated that Nebraska and Iowa are doing better than the rest of the nation as a whole, and that retail is not suffering nearly as much as many would believe. On the morning of the event, inflation was sitting at 8.5%, and Dr. Goss stated he firmly believed it would rise by another percent by the end of the year.

He also stated that he believed we would be seeing many employees returning to the office as opposed to working remotely. Dr. Goss called the times we were living in “unremarkable but remarkable”, commenting that there were many situations we were experiencing that were completely outside the norm of what we have ever encountered before, but at the same time the reactions to them were markedly the same.

He stated that the best indicators to watch for the economy for the rest of the year would be:

The Federal Reserve Balance Sheet

National Inflation Rates, which would be updated again on September 13th

The Employment Report, which was released on September 2nd

The 10-Year Treasury Yield

The Creighton Surveys, which are released on the first business day on the month and the Rising Value of the Dollar

“The Changing World of the CRE Workplace: How Businesses are Responding to a Hybrid Workforce”

This breakout session discussed how their businesses had pivoted to adding remote work to their day-to-day, and what they believe the future of the workspace would be because of the option. While many held beliefs that we would slowly be returning to the office in the future, they acknowledged that the pandemic had shifted people’s priorities, and that many workers are more determined to find a balance between work and home life.

Jason Lauritsen (Cultivayo) spoke on what he called the “Engagement Equations”, which focuses on employees’ well-being, satisfaction, and drive, and how it comes together to equal engagement. He stressed the importance of workers health, both mentally and physically, and that the idea of what an office was had drastically changed since 2019, and it was important to keep that in mind.

 Hobson Powell (LinkedIn), spoke on the new LinkedIn location that had been built in Omaha in Sterling Ridge. This is the second office location for the company outside of San Francisco. LinkedIn had used the Omaha location as a chance to reinvent what the office would look like, creating a space that put the needs of the individual first. Not only are workers not required to actually be in-office, but they are also given benefits if they chose to come in anyway, such as free food on-location, and quiet areas to recharge and refresh. They also use what Powell called “Neighborhoods”, small areas that employees can use to work and congregate at when they feel they must come into the office, so that they don’t need full-time desks and locations that wouldn’t be fully used.

Moderator: Nancy Pridhal, CEO of Lamp Rynearson. Panelists: Polly Harris, President of LEAD; Jason Lauritsen, CEO and Co-Founder of Cultivayo; Hobson Powell, Vice President of Global Support for LinkedIn; and Alysia Radicia, Partner with RDG Planning & Design.

“The Impact of Rising Interest Rates on Commercial Real Estate”

This session went further into what the market for commercial real estate is changing towards due to our economy. They stressed that many were backing away from retail development, as it is hard to be sure what the future of office spaces will look like. They felt that, as inflation continues to rise, they are seeing larger-scale business deals more than smaller projects.

In just one month, inflation moved 190 points, going up and down rapidly. Because of this, many are on the back foot when it comes to trying to plan for how the market will react. They stated that the speed in which rates increased due to inflation just this year have grounded a lot of business to a halt. They also noted the rapid increase this year in rental rates.

Panelists: Brad Hammit, Vice President of Mortgage Lending for Mutual of Omaha; Marc Wisdom, Executive VP of Pinnacle Bank; Jenn Kanne, Commercial Lender for Great Southern Bank; and John Reed, Managing Director of Debt & Equity for NorthMarq.

“The Changing World of Multi-Family: An Overview of Single-Family Rental”

There is a changing direction of housing, as many first-time home buyers have different needs and budgetary requirements than the generation before. National rent rates have increased to 8%, although it will hopefully fall back to 5% by the end of the year. Single-family housing rates have shot up, pushing more home buyers towards multifamily units instead.  They also commented that national rates on senior living centers show that there is a 15% vacancy across the board. They also commented that there is more national demand for the Midwest when it comes to investors.

Jerry Slusky (SB Communities) also discussed single-family rentals – using housing units found in Phoenix, AZ as an example – as a rising housing market. He described them as being between a “three-stacked multifamily” and a separately-owned home, with the homes close together. Homes between 700 sq. ft. to 1000 sq. ft. have been highly sought by investors and developers.

Moderator: Jerry Slusky, Esq., founder of SB Communities and Picket Fence Communities, as well as the Founder of the CRE Summit. Panelists: Josh Larsen, Vice President of Debt & Structured Finance for CBRE; Sean Miglini, Senior Commercial Lender for Veridian Credit Union; and S. Parker Stewart, Managing Director of Investment Sales for Northmarq.

Hall of Fame Luncheon

During the luncheon, they took the time to celebrate the four new members of the 2022 Hall of Fame. This year’s inductees were Brenda Dooley, VP of Facilities for First National Bank of Omaha; Curt Hofer, Owner and President of Curt Hofer & Associates; Kevin Rhodes, former Principal of Greenleaf Commercial Real Estate; and Mark Westergard, Project Manager for E & A Consulting Group.

They also awarded this year’s UNO Real Estate Scholarship to Joscelyn Vincent, current UNO student working towards a Bachelor’s of Science degree majoring in Real Estate and minoring in Marketing.

The keynote speaker was Amelia Rose Earhart, a former television reporter turned public speaker and private pilot who, in 2011, famously flew the original Amelia Earhart’s transcontinental flight. She is also the founder of the Fly with Amelia Foundation, which grants flight scholarships to girls 16-18.

“Urban Land Institute: Introducing the Omaha Chapter”

The ULI is a network of real estate and land use experts working together. It has chapters all over the world and is currently hoping to set up a chapter in Omaha.

ULI tracks data, such as emerging trends, in the areas where they have District Councils, which become available for members to be able to use to see what would be the best for the market they want to work in. It is a group of like-minded individuals that allows them to pool resources and work together.

The membership is $540 a year for an Associate level, or $1332 for Full, with discounts available for those that work with government, nonprofit, or academic jobs, students, and those under the age of 35.

Panelists: Scott Dobbe, Executive Director for Omaha by Design; Jason Fisher, President for Cushman & Wakefield | The Lund Company; Jay Lund, Principal for GreenSlate Development; and Joe Perry, VP of Development for Port KC and District Council Chair for ULI Kansas City.

Closing Session

At the final speech of the day, the panel gave their final thoughts on the key areas of the conference. Jay Lerner (The Lerner Company) stressed that brick-and-mortar buildings have been “going away” for a century, and the current economy isn’t having a negative effect on that at all. E-commerce sales were just under 11% in 2019, dipping in 2020, and rising to 13-14% in the last two years. Brick-and-mortar sales have gone up in the last two years, where many are combining online and in-store sales together as part of their focus, which Lerner referred to as “omni-channel”. He feels this is the only way retail will continue. Mike Potthoff (Colliers) added that you don’t see many dead retail left around Omaha, with many either revitalized or repurposed. He said that industrial development is in the same place now, as building offices was just a few years ago.

Richard Meginnis (NAI FMA Realty) gave his perspective on how Lincoln is doing, stating that their malls have grown, and many Sears buildings have come back to town. They are 50 points down on retail space, with office space being the “wild card” on the market. He also commented that there are many spaces that are being leased around town without actually having anyone inside them, calling them “shadow spaces”. He also said Lincoln was a large insurance city, with many insurance companies based there. Deb Graeve-Morrison (NP Dodge) underlined that industrial development has remained strong, but that there is a lack of “dirt ready” spaces to build, and that it is taking 18+ months to get a preliminary through the city. They are, however, usually fully leased by the time they are done being built. 10-15,000 sq. ft. is hard to find on the market currently, with many snatching them off the market as soon as possible.

Moderator: Jerry Slusky, Esq. Panelists: Ryan Ellis, CEO for PJ Morgan Real Estate; Jason Fisher, President of Cushman & Wakefield | The Lund Company; Bennet Ginsberg, Managing Director of CBRE; Deb Graeve-Morrison, President of NP Dodge; Kirk Hanson, Principal of ACCESS Commercial, LLC; Tim Langan, President of Investors Realty, Inc; Jay Lerner, President of The Lerner Company; Richard Meginnis, President of NAI FMA Realty; and Mike Potthoff, President and Principal of Colliers in Omaha.

The Summit had multiple panels presented at the same time, here are the ones not previously mentioned:

“Is Retail Rebounding Post-Covid?” Moderator: Kristi Anderson, Vice President of Brokerage Services in Nebraska for Colliers. Panelists: Lindsay Banks, Development Project Manager, Lockwood Development; Jami Heidemann, Vice President for CBRE; Brian Kuehl, Associate with Investors Realty; and Jared Sullivan, Associate Broker for The Lerner Company.

“The Changing World of CRE Construction Contracts and Leases: Is the GMAX Construction Contract History?” Moderator: Amy Lawrenson, Real Estate Attorney for Baird Holm LLP. Panelist: Kurt Cisar, Principal at Holland Basham Architects; and Tony Fucinaro, Managing Principal for Meyers Carlisle Leapley Construction.

“Navigating the Turbulence of Labor Shortages, Choked Supply Chains & Rising Construction Costs.” Moderator: Quinn Texmo, Business Development and Marketing for Turner Construction Company. Panelists: Mike Bruskin, Vice President and Chief Procurement Officer for Turner Construction Company; Tim Huber, President of Overland Constructor; and Ashley Kuhn, President of Blair Freeman Group.

“The Impact of Rising Interest Rates: Will Cap Rates increase?” Moderator: Ember Grummons, Investment Property Broker for Investors Realty, Inc. Panelists: Alex Burnam, Director of Acquisitions for StorageMart; Peter Frei, Vice President of Investments for NewStreet Properties; Kirk Hanson, President for Access Commerical; and John Heine, President of Oak Investment Real Estate.

Dr. Goss releases a free newsletter on economics, which can be accessed and subscribed to at gossandassociates.com. For the Creighton University Surveys, go to creighton.edu/economicoutlook/midamericaneconomy. For more about the CRE Summit, you can go to their website at attendcresummit.com/2022/about. Highlight videos of the sessions and speakers will be available on their website. The CRE Summit is an annual event and will be back in Omaha August 25, 2023.