The Kansas City area hasn’t been quiet lately when it comes to commercial real estate activity.
Law firm Polsinelli Shughart recently moved into a new 220,000-square-foot headquarters building at Kansas City’s Country Club Plaza. Teva Pharmaceutical is building a 154,000-square-foot, five-story building in Overland Park, Kansas. Occupancy here is expected in 2013.
Then there’s Kansas City’s Kessinger/Hunter & Company, which is building a spec building of more than 821,000 square feet in Olathe, Kansas. Building B will sit in the I-35 Logistics Park, and is one of three buildings that Kessinger/Hunter plans to build at the 200-acre business park.
The commercial real estate pros working this market are happy to see the activity. But they aren’t kidding themselves; yes, commercial real estate deals are taking place in Kansas City and its surrounding communities. But the deal activity is still far lower than it was before the recession.
And this fact continues to make the commercial real estate business in Kansas City – as it is across the rest of the country – a challenging one.
“In general, yes, things are improving,” said Paul Licausi, president of Overland Park, Kansas-based LS Commercial. “There is more activity across the board. And our market has performed better than have many other areas of the country. But we can still certainly do better.”
It’s that ‘do better’ part that the brokerage community in the Kansas City area is focusing on. And for commercial deal activity to increase at an even quicker pace, the brokerage community agrees that developers need easier access to financing and companies need to regain some of the confidence that has been shaken by a still-sluggish national economy and turmoil across the globe.
Only when this happens, brokers say, will we see a more robust recovery when it comes to commercial leasing and development in the Kansas City area.
“We are still not seeing a lot of new development of retail in our area,” said David Frantze, co-chair of the real estate division at Kansas City law firm Stinson Morrison Hecker. “In a lot of instances, the developers borrowed with an expectation of bridging out some of their financing. It’s been a tough market to do that in. You are seeing a lot of folks that want to be out of a situation and are not able to do it. Until that changes, there won’t be a lot of retail development in our area.”
Interested in learning more about what’s happening in Kansas City? Then pick up the newest issue of Midwest Real Estate News. Kansas City is one of the key Midwest markets featured in our October issue.
– Dan Rafter