The coronavirus pandemic has wreaked havoc on commercial real estate all over the U.S., as retail stores and restaurants have gone out of business and companies have shifted to more remote working.
But, at least so far, there hasn't been a big effect on the Lincoln market.
According to a report released recently by local commercial real estate firm NAI FMA Realty, the local market has been mixed, as vacancy rates for retail properties increased, while office and industrial properties both saw lower vacancy rates.
That continued trends that have been going on for several years.
Lincoln's retail vacancy rate rose to 7.1% in the first half of the year, which is the highest it's been since the end of 2011, when it was 7.2%.
"Lincoln's retail market felt some disruption in recent months due to temporary closures, reduced foot traffic and lower store capacities," NAI FMA said in its report.
Lincoln's vacancy rate remained well below the national retail vacancy rate, which was estimated at 10.2% in the second quarter by Reis Inc.
Lincoln has seen a number of retail store closures over the past two or three years due to bankruptcies or downsizings. Those trends continued in the first half of the year and were exacerbated by the coronavirus pandemic.
Pier 1 Imports closed its last remaining Lincoln store at SouthPointe Pavilions. That was the only major closing completed in the first part of the year, but there were others that were announced, including Gordmans, which announced in May that it was going out of business and closing all its stores.
A number of other store closures were announced in July and August and don't show up in the report, including Catherines, Justice, Lane Bryant and Jos. A Bank. Victoria's Secret also closed its location at SouthPointe.
The good news is that there continue to be new stores looking to come to Lincoln, although some openings have been delayed due to the coronavirus pandemic.
Party City is planning a 10,000-square-foot store at SouthPointe that may still open this year. And Ross Dress For Less has signed a lease for a nearly 23,000-square-foot store that likely will open in later winter or early spring next year.
Some smaller national retailers also opened stores in Lincoln in the first half of the year, including Sephora and Versona at SouthPointe Pavilions and Five Below at Wilderness Hills shopping center.
7 Day Furniture and Mattress Store opened a new 90,000-square-foot store and warehouse in January at 2240 Fletcher Ave. Omaha-based pop-up furniture store Rush Market opened temporarily in the 7 Day Furniture's former space at 5601 S. 59th St. in the Edgewood shopping center in May.
While retail struggled in the first half of the year, the other two categories of commercial real estate performed better.
The office vacancy rate in Lincoln continued to decline, hitting 8.3% in the first half of the year. That's down from 8.9% a year ago and is the lowest rate recorded by NAI FMA since the first half of 2009.
One of the big question marks for the office market is what's going to happen after the coronavirus pandemic subsides. Many companies transitioned their employees to remote work, and some in the industry believe many of those workers won't come back to the office, leaving companies with less of a need for office space.
Tom Graf, an NAI FMA sales associate, said in the report that companies often have "shadow" office space, which is unused space reserved for future expansion. Because of COVID-19, many companies have such shadow space because employees are now working from home.
"What happens with such space for the remainder of the year and the first half of the new year may have the biggest impact on our office market moving forward," he said.
The industrial market also continued its strong performance, with the vacancy rate dropping to 3% in the first half of the year.
Chirs Vasek, a senior associate broker at NAI FMA, said in the report that after a pause in April due to the economic uncertainty created by the pandemic, the industrial market returned to normal in June.
Lincoln stores that have closed or are slated to close