With the retail sector flat (but not deteriorating), construction of new projects remains minimal. No retail space of any type completed in 2011 and none had delivered in 2012 as of early October. Reis reports only a single substantial project under way per the date of this report: RED Development’s 250,000-square-foot Settlers Creek community center is scheduled to deliver in southwest suburban Papillion (Sarpy County) this October. RED described Sarpy as Nebraska’s third-largest and fastest-growing county from 2000 through 2012 with a 34% increase in population. “As one of Nebraska’s fastest growing communities,” notes RED, “Papillion is quickly becoming the center of growth for the area’s burgeoning private and business sectors.” Significant projects in the planning pipeline include 60,000 square feet of neighborhood center retail now available for preleasing in the massive Sterling Ridge mixed-use development (see Special Real Estate Factors). According to Colliers, Walmart is planning six of its smaller Neighborhood Market projects for the metro area (Neighborhood Markets tend to run at about 35,000 square feet). Openings should begin in 2013.
Net absorption in Reis’ 13.9-million-square-foot community-neighborhood shopping center sector for the first half of 2012 was positive at 1,000 square feet (the second quarter total was 43,000). July-August followed with 6,000 more on the plus side. Vacancy in this sector has been relatively flat—and relatively favorable. The rate for the second quarter was 9.2%, down 30 basis points from the quarter before but identical to the rate recorded at year-end and up just 10 basis points year-over-year. No change had followed as of the end of August. The national vacancy rate for this property category as of the second quarter was 160 points higher. Rents also show little recent-term movement. At $13.59 psf and $11.88 psf, asking and effective averages for the latest quarter were down 0.1% each (one cent) from the quarter before and were down 0.3% each since year-end. Each rate had increased by 0.3% by the end of August.
Reis expects a flat performance for the community-neighborhood shopping center space market for the remainder of 2012. Vacancy should end the year unchanged from the mid-year rate while rents show small overall losses (but small gains through the final months). New construction could begin within the next 12
to 18 months, stated Colliers’ second quarter report.