Commercial real estate in Lincoln shows steady market

LINCOLN, Neb. (KOLN) -Three years ago, many businesses were starting to limit operations or close their doors because of the pandemic. In total, NAI FMA Realty manages about 4 million square feet of commercial property in Lincoln. They put together market reports about every six months. The most recent dove into how the sector fared at the back end of 2022.

While the residential real estate market continues to fluctuate, in Lincoln, on the commercial side, things like shops, offices, and industrial spaces have remained steady.

“Post-pandemic, things are starting to come back,” said Mike Ball, NAI FMA Realty. “Slowly but surely.”

An area that has been shaped by the pandemic is office space. As more companies in Lincoln work off a hybrid model of in-person and remote work, changes have been made. People who are expected to work in person are looking for more amenities.

“To potentially entice people to come back to the office, such as a gym, or, you know, better parking, all kinds of different things,” Ball said.

An encouraging trend that was consistent across the board in the second half of 2022, there were not as many for sale or for rent signs. Office, industrial and retail categories all saw a drop in the number of vacant spaces. For retail, it’s the lowest that number has been in four years.

“You know, as you drive around, you might notice that a lot of the big boxes are not empty,” Ball said. “And a lot of the neighborhood retailers are pretty full with very little vacancy.”

Despite ongoing economic indicators, Lincoln’s market is usually stronger than what you would see nationally, meaning the outlook for commercial properties is good.

“I think looking into ‘23, I still think we’ll have that same trend is kind of a healthy even, even flow throughout the year,” Ball said.

One area that did see a decline in construction on industrial and office spaces. In the latter half of 2022, there was a drop in building new places and updating existing ones in those two categories. The report said that can be attributed to rising interest rates and high construction costs.

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