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KansasMarket ReportsMidwestMidwest Market ReportsRetail

How to Transform the Retail Landscape in Topeka, Kansas

by Kristin Harlow

By Cody Foster, Advisors Excel Topeka, the capital city of Kansas, has a population of approximately 125,000 people, located in a 12-county region with over 531,000 residents. The region’s population has grown over the past five years and is expected to increase by another 2.1 percent between 2023 and 2028. With an unemployment rate of around 3.5 percent as of mid-2024, the city’s economic outlook remains stable, providing a solid foundation for redeveloping key commercial properties — including the West Ridge Mall, the third-largest indoor shopping center in Kansas at 992,000 square feet. Since it opened in 1988, the West Ridge Mall has been a significant part of the city’s commercial landscape. The site features ample parking and anchors the Wanamaker Road commercial corridor, the region’s most significant retail hub, which garnered $1 billion in retail, grocery and dining spending during the past 12 months.  However, like many malls nationwide, it faces challenges in a rapidly evolving retail environment. Retail trends: following consumer behavior The West Ridge Mall has seen a steady decline in business and occupancy over the last decade. Anchor stores Macy’s and Sears closed in 2012 and 2018, respectively.  Various management companies tried to keep the retail …

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KansasMarket ReportsMidwestMidwest Market Reports

Wichita Market Continues to Show Signs of Substantial Growth

by Kristin Harlow

By Bob Ale-Ebrahim, Occidental Management Wichita has seen significant growth in the commercial real estate market for two years in a row. There have been sizable investments in downtown, new industrial campuses, medical offices and higher education institutions. These projects are spurring strong momentum in downtown Wichita.  Wichita is a thriving hub of social, professional and cultural experiences with 350 new residential units under development with over 120 unique retailers and 4.1 million square feet of occupied office space. Add in the solid job growth, and Wichita continues to show significant signs of a solid and expanding economy.  Projects recently completed include the WSU Tech National Institute for Culinary & Hospitality Education (NICHE), The Hudson St. Francis (event space), The Arcade and the Chester I. Lewis Reflection Square Park. Projects under construction include Hi-Tone Lofts, Sutton Place student housing and the Broadway Plaza AC Marriott Hotel.  Projects in the planning stage are street improvements at Commerce and St. Francis streets, the Wichita Biomedical Campus, Wichita Transit multimodal facility, ballpark/riverfront stadium development, Exploration Place amphitheater and destination playscape, Delano Riverfront Stadium project and the Kingdom Building.  Wichita’s economic development generated more than $418 million in capital investment in 2023 alone. Remarks …

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KansasMarket ReportsMidwestMidwest Market ReportsMissouriMultifamily

Kansas City Demand Generators Beckon Multifamily Capital

by Kristin Harlow

By Max Helgeson, CBRE As the national real estate landscape undergoes transformative shifts, Kansas City has emerged as one of the region’s most attractive multifamily markets. There are a myriad of attributes making Kansas City an unrivaled destination to deploy capital in the heart of the Midwest. Here are six key areas that propel the market to the forefront of real estate investors’ considerations.  Economic anchors, diversification Kansas City has one of the nation’s most diverse economies with no sector comprising more than 15 percent of overall employment. A national leader of several durable industries provides unmatched economic stability and significant risk mitigation for investors. Moreover, the metro’s strategic location in the heart of the U.S. and strong transportation infrastructure make it a favored logistical hub for corporations across the world. Finally, the market is a base for startups and entrepreneurs drawn to the area’s abundant talent pool and competitive office space rates.  Strategic infrastructure, connectivity Infrastructure is a cornerstone of Kansas City’s rise to prominence. The city’s strategic network of highways, interstates, railways, fiber networks and a major airport not only facilitates connectivity but positions it as a hub for commerce. This strategic infrastructure acts as a magnet, pulling …

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IndustrialKansasMarket ReportsMidwestMidwest Market ReportsMissouri

Kansas City’s Industrial Market Is Positioned for Continued Growth

by Kristin Harlow

By John Faur, Newmark Zimmer The Kansas City industrial real estate market has been on a historical run since 2020 with over 40 million square feet of inventory added in that time frame. This run of new construction has catapulted Kansas City to the 15th largest industrial market in the country by square footage, despite only being the 31st largest MSA by population. During most of this period, the strong market dynamics which exist in Kansas City, such as strategic highway infrastructure, a centralized location, four Class-1 railroads, availability of bulk land sites and an active development community, were further amplified by the low-interest rate climate and record levels of tenant activity. The continued high pace of speculative industrial construction starts in 2022 positioned 2023 to experience a healthy amount of new deliveries, with almost 8 million square feet of speculative industrial space delivering to the market. While the financial markets presented opportunity during this run of growth, continuous rate hikes in 2023 created challenges that resulted in a significant decrease in year-over-year speculative construction starts (3.5 million square feet of speculative construction has occurred year to date in 2023 as compared with more than 13 million square feet in …

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IndustrialKansasMarket ReportsMidwestMidwest Market ReportsMissouri

Kansas City Industrial Market: Yesterday, Today and Tomorrow

by Kristin Harlow

By Scott Bluhm, Newmark Zimmer Since 2016, the Kansas City industrial market has been on a hot streak. We observed more opportunities and increased user activity. There have been consistent years of record positive space absorption and the delivery of Class A buildings, whether speculative or build-to-suit.  The peak of that hot streak was in 2022. The year concluded with records in positive absorption, vacancy and rental growth. By the end of 2022, Kansas City became the 15th-largest industrial market in terms of square footage, surpassing Seattle. Significant statistics for 2022: •Over 16 million square feet of positive absorption •A vacancy low of 3.6 percent •A 10.6 percent increase in rental rates The year 2023 has been unique due to economic conditions and uncertainty. New speculative construction starts are down approximately 70 percent, with around 2.5 million square feet breaking ground in 2023. Most of the speculative buildings delivering in 2023 were projects that began construction in 2022.  Annual net absorption has decreased to 2.5 million square feet in the first and second quarters. For reference, the fourth quarter of 2022 saw a record-setting net absorption of approximately 7.3 million square feet, and the third quarter of 2022 had 3.2 …

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IndustrialKansasMarket ReportsMidwestMidwest Market Reports

Many Industries Such as Aerospace Drive Wichita’s Industrial Growth

by Kristin Harlow

By Ted Branson, Landmark Commercial Real Estate There continues to be strong demand and a resulting shortage of industrial buildings in Wichita from 1,000 to 100,000 square feet for lease or for sale, not dissimilar from the fierce competition for housing, with prospects paying well above market rates just to keep from losing out “again” on an available property.  With that, Wichita is seeing vacancies continue near 5 to 6 percent, an increase in average lease rates from $4 to $6 per square foot, and average sales prices increasing from $35 to $50 per square foot. New construction prices carry that considerably higher. That demand for space, and the increasing prices that prospects will pay, often leads to land sales and new construction. Many of the supply chain issues that caused construction to take up to two years have been improved or resolved, and several projects are underway. Developers have built several speculative warehouses, most notably in the new ICT21 Industrial Park, the former location of the Derby Oil refinery. Ron and Marty Cornejo did a masterful job of clearing the site of structural obstacles and rendering pollution issues innocuous, with Conco erecting three first-class, tilt-up concrete, high-bay warehouses, with …

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IndustrialKansasMarket ReportsMidwestMidwest Market ReportsMissouri

High Demand Buoys Kansas City Industrial Market

by Kristin Harlow

By John Hassler, Newmark Zimmer At the close of 2022, Kansas City’s industrial property market hit heights that would have been unimaginable only a decade prior. While Kansas City ranks as the 31st-largest MSA in the United States by population, it is the 16th-largest market nationally based on industrial square footage with nearly 315 million square feet of total inventory.  Further, Kansas City ranks 10th nationally in the percentage of annual net absorption as compared with its market size and has added an impressive 62.5 million square feet of newly developed square footage over the last 10 years. Many factors have contributed to the market’s growth trajectory including the nation’s most geo-central location (a two-day truck drive to 85 percent of the continental U.S. population), the confluence of five Class-1 railroads (with four area intermodal centers), the intersection of four of the nation’s busiest interstates (including I-35 and I-70), an available and reasonably priced workforce, an abundance of industrial development sites in pro-development communities, and an experienced, well-capitalized concentration of developers headquartered in the area.  Kansas City has leveraged those various logistical and strategic advantages at a perfect time to capitalize on an all-time high in industrial space demand with …

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KansasMarket ReportsMidwestMidwest Market ReportsMissouriMultifamily

No End Is in Sight for Kansas City’s Multifamily Development Needs

by Kristin Harlow

By Chris Armer, Hoefer Welker People who call the Kansas City metropolitan area home know it’s a desirable place to live. From the robust job market and vibrant arts scene to its rich history and, of course, stellar sports teams, the Kansas City metro area attracts a diverse group of people. Kansas City is evolving and so are its housing needs.  In recent years, the demand for multifamily development in Kansas City has grown, driven by a range of factors. Mass retirements and flexible work arrangements are shifting priorities, while the housing shortage and rising interest rates are sending prospective homeowners on the search for attractive alternatives. The multifamily housing trend stands to gain momentum, creating a space for discerning real estate and architecture firms with development expertise to pave the way in an evolving housing market.  The great shuffle   Much has been said about the Great Resignation, but the COVID-19 pandemic didn’t only affect young and midlife workers who left their jobs to pursue higher-paying and more meaningful employment. It also hastened the Great Retirement, a massive wave of baby boomers leaving the workforce, many of them earlier than planned.  Now those homeowners are selling their suburban single-family …

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IndustrialKansasMarket ReportsMidwestMidwest Market ReportsRetail

Retail, Industrial Brokers in Wichita Market Remain Busy

by Kristin Harlow

Wichita experienced considerable retail and restaurant expansion throughout 2021, with other new stores planned for 2022. The two biggest new players to Wichita include Top Golf at 29th Street and Greenwich Road, now under construction, and Scheel’s entering the market with a new 220,000-square-foot store to be located in the former Sears space at Towne East Square. Top Golf is anticipated to open in late 2022, spurring more retail activity on North Greenwich.  Furniture stores have been actively backfilling big boxes, including Bob Mills who took the former Michael’s, and Wichita Furniture, a strong regional player, taking the former 100,000-square-foot Kmart building on West Kellogg/US-54. Discount stores have continued to find a way to open more locations to increase their footprints in the market, both new construction and conversion of former retail spaces. Ollie’s Bargain Outlet opened its west store at Central and Ridge roads, and is also opening a store at Brittany Center.    Quick-service restaurants (QSRs) have been active, including two new locations opening in 2022 for Dunkin’ and several new Dutch Bros Coffee locations as they enter the market as well in late 2022 and 2023. Tropical Smoothie Café opened a location last year and Smoothie King …

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IndustrialKansasMarket ReportsMidwestMidwest Market ReportsOfficeRetail

Despite Pandemic, Wichita Market Experiences Significant Urban Development

by Kristin Harlow

By Tom Johnson, NAI Martens The overall Wichita economy is not out of the woods yet, but numerous factors point to a continuation of the recovery from both the Great Recession and the impact of the pandemic. Since the significant employment downturn during the second quarter of 2020, the Wichita metro area has markedly recovered but remains well below 2019 non-farm employment. The seesaw unemployment rate has now declined to just over 5 percent. All employment sectors are expected to increase from 3 to 6 percent in 2021 with retail, leisure and hospitality leading the way as restaurants and travel return to pre-pandemic levels. In the background of all the pandemic noise have been significant gains in urban development with over $1 billion of public and private sector investment since the recession. ● Residential has grown exponentially with 21 new and renovated properties representing 1,228 units with some of the highest rental rates in the city. ● With over 100 restaurants and local shops, retail has increased significantly, adding almost 500,000 square feet, a 39 percent  increase with more to come. ● Starting with the Ambassador Hotel renovation, the hospitality sector has added 375 rooms with another 95 rooms in …

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