The shuttering of more store locations in the second half of 2019 left slightly more local retail space unoccupied.
According to an NAI FMA Realty report released Tuesday, the retail vacancy rate in Lincoln hit 6.6% at the end of last year. That's up from 6.4% at the end of June and 5.3% at the end of 2018.
Unlike in the first half of the year, when all four Shopko locations plus Sears shut their doors, the second half of the year was pretty quiet. The biggest store closings were at Gateway, where Forever 21 vacated a 23,000-square-foot space and Rush Market ended its six-month temporary stay in the former Younkers space. Dress Barn also closed its store at SouthPointe Pavilions.
There also were some big positives, such as At Home opening in the former Shopko space at 27th Street and Pine Lake Road and new small retailers coming to town, such as Five Below.
But overall, the market was relatively weak, leading to the highest retail vacancy rate since the first half of 2012.
"Retail is the sector people are kind of uneasy about," said Mattison Wenzl, an NAI FMA sales associate.
Lincoln is better off than the national retail scene as a whole, however.
According to real estate data service Reis, the national retail vacancy rate was 10.2% at the end of 2019, the same as it was at the end of 2018, while the vacancy rate specifically for malls hit a 20-year high.
"There's not a lot of positive news in retail right now," said John Albright, vice president of development for Starwood Capital Partners, which owns Gateway Mall and more than two dozen shopping centers across the country.
Albright, who is a Nebraska native, was the keynote speaker at NAI FMA's "State of the Market" presentation Tuesday.
He said Starwood currently is talking to entertainment and multifamily developers who are interested in Gateway, and he foresees the possibility of office tenants filling space as well.Â
"Gateway's got a little too much retail," Albright said.
The retail market's woes aside, other commercial real estate sectors are doing quite well in Lincoln.
The office vacancy rate at the end of 2019 was 8.6%, the lowest it's been since 2008, said Mike Ball, NAI FMA's vice president of sales and leasing.
Last year "was a really great year" for the office market in Lincoln, Ball said.
The market for industrial space also continues to be strong, with the 3.1% vacancy rate the lowest since the end of 2015.
NAI FMA President Richard Meginnis said much of the demand for industrial space is driven by a strong construction market, which means companies are looking for spaces to store building materials and equipment.
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