A tough year filled with store closings, missed rent payments and rising bankruptcy filings. That’s what the Lerner Company found in its analysis of Omaha’s retail market in 2020.
This isn’t surprising. Retail markets across the country struggled last year — and continue to struggle — thanks to the COVID-19 pandemic. Many consumers are still nervous about shopping in brick-and-mortar shops or eating in restaurants. Many states still have restrictions in place on retailers.
It’s combined for a challenging year for this commercial sector. And in Omaha? Lerner Company in its 2020 Retail Market Summary report analyzed 371 retail properties with more than 30.5 million square feet of inventory. Lerner found that the vacancy square footage for these properties came in at just 3.4 million, which equals a vacancy rate of just under 11 percent.
This isn’t to say that all the retail news in Omaha was bad last year. Just look at the Northwest submarket. The vacancy rate here of 7.71 percent This the lowest of all the retail submarkets in the Omaha market.
In positive news, Fareway Meat and Grocery broke ground here and will open its fifth location in 2021 at 132nd Street and Fort Street. Lerner also anticipates the opening of Chipotle, McDonald’s and Taco Bell in this corridor in 2021.
The news in the area’s Southwest retai market wasn’t as good. The vacancy rate here stood at 14.71 percent at the end of 2020, and the once vibrant Oakview Mall was listed for sale last year and will be losing three of its anchor tenants. The last Fresh Thyme supermarket in this submarket closed its doors along with Gordmans at Lakeside Plaza and the Super Saver at South 144th Street and Q Street.
The vacancy rates in Omaha’s other submarkets varied, with the North Central submarket ending 2020 with a vacancy rate of 11.42 percent, the South Central market with a rate of 10.85 percent, East Downtown 8.71 percent, Sarpy 9.67 percent and Council Bluffs, Iowa, 8.23 percent.
What does the future hold for Omaha’s retail market? Lerner is predicting better times. Part of the reason is that construction crews this year will demolish several outdated and underperfoming retail centers. Crossroads Mall, with the exception of Target and its parking garage, is being torn down to make way for a new mixed-use project scheduled to come online in 2024.
Mall of the Bluffs is being demolished to make way for a new Menard’s, which is leaving its existing big-box location at Lake Manawa Power Center.
The opening of Top Golf last year was a bright spot in the Omaha retail market. The market will also see several hundred square feet of retail space conver to self-storage, something that will take long-dated product off the market.
The Omaha market is also looking forward to the development of several multi-year projects such as Heartwood Preserve, Avenue One, The Riverfront, Regency Landing and the likely redevelopment of Oakview Mall.
Lerner makes a prediction in its report, too: It says that in the near future, the strongest retailers will only grow stronger while those retailers who don’t innovate and adapt will close their doors. And that has been the case for a long time, even before COVID-19 upended the world.
