Continued Retail Recovery

Mar 1, 2022

Director of Brokerage Services, Broker

Lincoln’s retail market continued its recovery during the 1st half of 2022 with average vacancy rates dropping from 5.0% to 4.2% at the end of June. There was positive net absorption of 167,441 square feet during this period and average rental rates remained virtually flat at $14.40 PSF on a triple net basis. Consumers seem to have adapted to any lingering risk posed by Covid-19 and retail traffic has mostly returned to normal. 

Downtown Lincoln continues to slowly rebound although the reduced daytime population due to the changing office environment has mitigated this recovery. The trend toward more residential units and additional hotel rooms is helping to sustain retail activity downtown. Kinkaider has signed a lease and plans to open a German beer hall in the former Scooter’s Coffee space at 8th & Q in the Haymarket. There are also two new dog bars scheduled to open soon in Lincoln, one located in the Telegraph District at 1975 M Street. 

On a national level, labor challenges continue to affect retailers as businesses compete for a limited pool of workers returning to the workforce after the pandemic-related disruptions. And while consumer spending seemed to be fairly resilient to inflation during the first half of 2022, there are signs it could be slowing as inflation eats into discretionary spending. 

Looking toward the second half of 2022, we expect Lincoln’s retail market to remain healthy as people balance their online shopping with trips to local stores and restaurants, helping brick-and-mortar retail continue to bounce back. Inflation will likely have some impact on local businesses, but we don’t anticipate a major downturn as a result.

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