by Dan Rafter
Last year was a good one for the Kansas City commercial real estate market. How good? The numbers from Block Real Estate Services’ 2014 edition of The Real Estate Report, Metropolitan Kansas City, tell the tale.
According to this year’s version of the report, all property types and submarkets saw improvements in 2013.
This held true even for the office market. Vacancy in this sector fell from 13.4 percent to 11.7 percent by the end of 2013, according to Block Real Estate Services. Spec office development still isn’t likely, but major build-to-suit projects — including Block Real Estate Services’ build-to-suit development for Teva Pharmaceuticals — should continue in 2014.
As in many Midwest markets, the industrial sector in Kansas City celebrated a strong 2013, too. According to the Block report, spec development has returned to this sector as the industrial vacancy rate in the Kansas City market fell below 5.5 percent by the end of 2013.
Some notable spec industrial developments in the region include the Lenexa Logistics Centre, a 1.6-million-square-foot mid-bulk project in Lenexa, Kansas.
Multi-family, to no one’s surprise, has remained strong. Vacancy rates in this sector are at or near historic lows. Developers are adding new product to the market, including Block’s first phase of the WaterCrest at City Center, which will bring 306 new rental units to Lenexa’s City Center. As of January of 2014, developers have 3,500 new rental units planned or under development in the Kansas City market.