Lincoln’s long-neglected I-80 exit finally getting its due

And for most of that time, it has remained one of the most underdeveloped exits in Lincoln.

There remains no development on the north side of the exit, and up until a few years ago, development on the south side consisted largely of a gas station, an antique mall and a few other mostly industrial businesses.

But things are now changing, and the area is seeing a large amount of new projects.

A huge data center project, the owner of which appears to be Google, has been in the works on the northwest corner of the exit for more than four years. Not much has happened since the project was originally proposed in 2019, but it appears to still be slowly moving forward.

It’s on the south side of the interstate where the bulk of the development is occurring, however.

A few blocks east of the exit, Camping World opened a recreational vehicle sales and service dealership last year. Just to the east of that, a new warehouse development is under construction for Central Lumber Sales.

West of the exit on the north side of the road, Alpha Brewing built a new production facility a few years ago.

More projects are in the works as well.

Omaha developer White Lotus wants to build nearly 1 million square feet of warehouse and distribution space at 65th Street and Arbor Road, just to the south of Camping World.

And local developer Concorde Management & Development is working on a development west of 56th Street that will include light industrial uses along with some retail and service businesses.

Steve Henrichsen, development manager for the Lincoln-Lancaster County Planning Department, said he doesn’t know what has sparked the recent interest in the area.

“That’s a great question,” Henrichsen said.

He said the city extended a sewer line to the area about 15 years ago, but it didn’t spur a lot of development at the time.

What could be driving current interest in the area is a boom in industrial real estate.

Thanks to a number of factors — growth in e-commerce, a resurgence of U.S. manufacturing and a strong construction industry — demand for industrial space has skyrocketed over the past several years.

According the commercial real estate data firm CoStar, the national vacancy rate for industrial real estate was 4% at the end of 2022, the lowest ever recorded.

But the market is even tighter in Lincoln, where intense demand combined with a lack of construction of new space has led to an unheard-of industrial vacancy rate of 0.81% at the end of last year, according to a report from Greenleaf Commercial Real Estate.

John Linscott, president and director of asset management at Greenleaf, said the main factors driving the low vacancy rate in Lincoln are high demand coupled with not enough supply of industrial space.

“There is a lack of industrial-zoned ground in general,” Linscott said.

That means that even if there were companies champing at the bit to build industrial space, there wouldn’t be enough areas in which to build it.

Still, there was nearly $113 million in industrial building permits in the first half of 2022 in Lincoln, a record for a six-month period, according to Greenleaf. But when interest rates started climbing, building permit value declined to less than $12 million in the second half of the year.

As for all the projects underway and planned near the 56th and I-80 exit, Linscott said he’s skeptical the existing infrastructure in the area — especially roads — can handle all of it, “but I’m super glad that that type of investment and interest is coming to the Lincoln market.”

Concorde Management & Development is hoping to capitalize on the demand for and interest in industrial space with its project, called Salt Bank Business Park.

The market “is crying out for more industrial space” said David Schmidt, president of the real estate development firm.

Salt Bank Business Park has 12 lots spread out over about 40 developable acres. It is proposed to include some “light” industrial uses such as warehouse and assembly, along with some potential retail uses such as fast food restaurants.

A couple of the lots have been sold to industrial users, although Schmidt declined to name the buyers.

Schmidt said the park will likely develop in phases over several years, and the potential uses could evolve.

“We kind of wanted to see how this thing sifts out and see what the users are and then target some that make sense,” he said.

There is room for more potential development in the area as well.

Later this month, the Planning Commission will hold a public hearing on a proposed blight area covering more than 1,000 acres starting roughly a half mile south of I-80 and stretching north to Fletcher Avenue and east from 56th to 84th streets.

Of course, not all industrial development is going on at 56th and I-80. The Lincoln Airport continues to attract users to its LNK Enterprise Park and two new industrial developments near 14th Street and Saltillo Road, at the west end of the new South Beltway, are working their way through the city approval process.

But 56th and I-80 seems to be the area with the biggest projects and the most staying power.

“We’re excited about everything around us,” Schmidt said. “I mean, it’s just all kind of coming together, and it’s going to real hot out there over the next 10 years.”

“Hopefully we can fill the industrial needs and a little bit of retail on the highway,” he said. “That’s the goal anyway.”