National Retail Tenants Enter, Expand Into Kansas City Market
The greater Kansas City area retail market remains solid as a rock, despite CoStar Group’s mid-year report showing a slight decline in the average asking rental rate and a slight increase in vacancy. The retail vacancy rate in the second quarter of 2017 stood at 5.7 percent, up slightly from the previous quarter’s 5.5 percent. The average asking rental rate for retail is $13.05 per square foot, down from $13.07 in the previous quarter.
Local, regional and national restaurant chains continue to expand with strong success throughout all areas of the Kansas City market, and “new-to-market” users continue to open their doors.
Currently, there is approximately 570,000 square feet of retail space under construction in the Kansas City area and various mixed-use projects under development. Additionally, several new shopping center projects have recently been announced and are quickly gaining traction with restaurant and retail users.
One of the major catalysts for the widespread retail and mixed-use boom throughout greater Kansas City is the various incentives that have been made available to developers including tax increment financing, community improvement districts, transportation development districts, tax abatement and other incentives.
On both sides of the state line, as sites become more expensive and harder to find, this is where incentives come into play to make up the difference. What follows is a list of notable 2017 greater Kansas City openings and project updates.
New openings abound
• Cosentino’s Market grocery chain recently opened a 55,000-square-foot store at the BluHawk mixed-use development, located at 159th Street and Antioch Road in Overland Park, Kansas.
• Academy Sports + Outdoors continues its Kansas City expansion with the recent opening at Liberty Commons in Liberty, Missouri.
• Main Event Entertainment, which has been expanding throughout Kansas City, recently opened an approximately 49,000-square-foot location at I-29 and Barry Road in Kansas City, Missouri.
• Costco will soon be opening its first North of River location at Highway 152 and Platte Purchase Drive in Kansas City, Missouri.
• Whole Foods Market is scheduled to open later this year near the University of Missouri – Kansas City in the Midtown Kansas City submarket.
• Home Goods is preparing to open in the 25,000-square-foot, former Fresh Market at Prairie Fire, a mixed-use development located at 135th Street and Quivira Road in Overland Park.
• Nike has recently opened its first retail store in Kansas City. The 12,000-square-foot store is located at Country Club Plaza.
• Kneaders Bakery has entered the Kansas City Market and recently opened in Belton and Blue Springs, Missouri, and is adding additional locations.
• Freddy’s Frozen Custard & Steakburgers just opened in Raytown, Missouri, and announced plans for another new location near the Legends Auto Mall in Kansas City, Kansas. Freddy’s is based in Wichita and is looking to add more sites in the Kansas City market.
• The fast-casual restaurant sector has been aggressively growing. Slim Chickens, Zaxby’s, Raising Cane’s, Andy’s Frozen Custard, MOD Pizza, PIE Five and Dairy Queen are among the many other local and regional restaurant chains in expansion mode.
Projects in the pipeline
• South Kansas City’s Ward Parkway Center conversion located at 89th Street between State Line Road and Ward Parkway in Kansas City, Missouri, brought in six new restaurants totaling 31,000 square feet, including Charleston’s, The Garage, Ted’s Café Escondido and MidiCi.
• Dick’s Sporting Goods and H&M are under construction at Summit Fair Shopping Center located at Highway 50 and Chipman Road in Lee’s Summit, Missouri. Both will be opening soon. Dick’s relocated from nearby Summit Woods Crossing. Big Whiskey American Restaurant has recently opened its first Kansas City location at Summit Fair.
• Price Chopper grocery chain is under construction with a relocation to Blue Springs, Missouri.
• Johnson County, Kansas has historically been one of the strongest retail markets in the greater Kansas City area, and continues to grow with the recent addition of 220,000 square feet home to Scheel’s Sporting Goods, Dave & Buster’s, Main Event Entertainment, two new convention center hotels and many other proposed new developments.
• Loew’s Hotels & Co. has announced a new joint venture with KC Hotel Developers LLC to build the Kansas City Convention Center’s 1,000-room hotel. Belmont Promenade LLC plans to build a shopping center at Shawnee Mission Parkway and Maurer Road in Shawnee, Kansas, and demolition of the old Metcalf South Mall at 95th Street and Metcalf Avenue in Overland Park is underway to make room for a new Lowe’s Home Improvement store, with additional users to be announced.
• The Kansas Speedway area in Kansas City, Kansas, is booming since the announcement of the new $160 million American Royal Facility. Construction of both the Legends Auto Mall and a U.S. Soccer training facility, along with several new hotels, is also in the pipeline.
• North of the river, the former Metro North Mall is undergoing demolition. New tenants are in the works. Across the street at Barry Road and Highway 169 in Kansas City, Missouri, Twin Creeks Center (formerly Barry Town Center), currently anchored by Target, Kohl’s and Babies “R” Us with the new Costco just to the north, will get $45 million in upgrades.
— By Max Kosoglad, Hospitality & Retail Specialist, Block & Co. Inc. Realtors. This article first appeared in the September 2017 issue of Heartland Real Estate Business magazine.