ADVERTISEMENT OMAHA RETAIL MARKET ADAPTS WELL TO CONSUMER BEHAVIOR The retail sector of the commer-cial real estate market in Omaha, Nebraska, has seen a solid 2023. The city’s diversi ed economy and adaptability have allowed Omaha to weather a multitude of challenges. As consumer behavior continues to evolve, we are seeing our community adjust and work together to improve and grow this Sara Hanke city. The Lerner Compared with the national Company average, Omaha has seen higher numbers in year-over-year retail sales, with retailers announcing expansion plans across various sectors. Our local, national and fran-chise clients are forging ahead to open stores, hold-ing true to their growth plans. This shows long-term con dence in our consumer spending patterns and the broader economy. Many of the fastest-growing concepts are attuned to the nancial pressures faced by their customers due to in ation. Discount retailers, quick-service restaurants (QSR) and experiential concepts are ex-panding and remain strong, as brands are adjusting to changing consumer preferences and behaviors by creating immersive experiences, personalized services and social media integration. With all the growth and positive development happening in Omaha, we can’t ignore the state of the economy and how certain shifts will impact re-tail as we wrap up 2023 and look to 2024. Consumer spending on food and entertainment has been on a steady rise since COVID, despite the rise in prices on almost everything impacting our wallets. 2023, especially in the retail sector of commercial real es-tate, has been strong, but as the fourth quarter clos-es, we are seeing signs of a potential slowdown. Omaha’s unemployment has remained low, but we are experiencing a labor shortage in certain in-dustries such as service and the trades. New busi-nesses are opening, but it’s hard to imagine how the current spending trends compounded with the shortage of help is sustainable in the long term. Re-maining optimistic is challenging when it is dif cult to feed a family on fast food for under $60 and gro-ceries are signi cantly more expensive than a year ago. Our dollars are not stretching as far and that fancy cup of coffee may become more of a luxury than a daily need. Compounding this, with higher interest rates consumers are trending toward hold-ing versus buying. Future challenges will not be the desire for expan-sion; instead, it will be the shortage of ready sites as nancing new projects remains challenging due to nancial institutions pulling back during these uncertain times. As we experienced in recent years, retailers and landlords will continue to be more cre-ative to get deals done. Smaller footprints, more drive-thrus and technol-ogy-driven concepts are already part of the chang-ing landscape. QSR concepts are looking for sites with double drive-thru lanes as their income is de-rived primarily through this source as well as mo-bile and delivery orders. Major grocers are offering an easier method of pickup and delivery; Hy-Vee, for example, is expanding its footprint to include dedicated drive-thru-only for online orders. With these current and potential future changes, I see adaptability and hope. Omaha has proven to be resilient amid the highs and lows of economic cycles. Considering all the challenges that appear to be stacked against us, we are seeing development projects come out of the ground throughout Omaha, from downtown to far west. Plans for North Oma-ha’s Telegraph District were recently announced along with the new Builders District. Farther west, Gretna Landing is well underway. Heartwood Preserve, at 144th and West Dodge, is taking shape as new tenants are announced and more to be added. With the addition of Costco and Fleet Farm along the West Maple corridor, we are seeing steady residential and commercial growth in the Northwest. Centrally, the long-anticipated Crossroads redevelopment continues forward and is anticipated to go vertical in 2024. 2023 has seen a fair amount of investment in downtown Omaha. We have watched Gene Leahy Mall at The River-Front transform into a destination that rivals larger cities. The beauti cation and addition of greenspace not only makes our urban areas more desirable for families but also increases foot traf c and commerce for businesses. We are watching a constant transfor-mation of the landscape throughout the city. All of this growth does not come cheap. The re-sources and time to develop these projects come with an increase in asking rents. We have felt the lack of inventory heightened within the retail space, hovering around 5 percent vacancy all year. These new developments should make a dent in these low vacancy numbers as we head into 2024, sparking new action and bringing in fresh concepts to the Omaha market. Sara Hanke is an associate broker with The Lerner Company. “I know how you feel about all this Christmas business, getting depressed and all that. It happens to me every year. I never get what I really want. I always get a ton of stupid toys or a bicycle, or clothes, or something like that. What I really want is real estate” -Lucy Van Pelt Charlie Brown Christmas (1965) 10855 W Dodge Rd, Ste 270 • Omaha, NE 68154 • 402-330-5480 • www.lernerco.com 18 • December 2023 • Heartland Real Estate Business
Heartland Real Estate Business December 2023: Page 18
