By Garrett Cohoon, Block & Co. Inc. Realtors
The commercial real estate activity in the Kansas City metropolitan area showed substantial growth in 2024 for the retail, multifamily and industrial sectors. The office sector is still seeing record vacancy rates, but the annual loss over 2023 is slowing down. According to CoStar, the office vacancy rate for 2024 is up 11.8 percent in Kansas City while the national index is at a 13.9 percent increase. That’s only 0.5 percent higher than last year in Kansas City and we expect to see that trend turn around in the next year.
The retail sector saw new brands like Aritzia grow into the Kansas City market. Whataburger opened its 14th location in the past two years as drive-thru restaurants have continued to be a preference for consumers and investors alike. Wellness-based businesses and health clinics have also made good strides in the market.
Kansas City has seen an increase in new experiential attractions this year, including national businesses like Puttery minigolf, Andretti indoor karting and SandBox VR. These new attractions have been key to many new development complexes and redevelopments of existing strip centers. Mattel also announced a new adventure park to be built by the Kansas Speedway and Legends outlets in Bonner Springs.
We’ve seen several new industrial parks completed and quickly occupied, including the Southpark Commerce Center, a 382,500-square-foot development. Mertix, a Minnesota developer, also completed and leased three more industrial buildings bringing the total square footage to approximately 3.3 million square feet.
Eyes on certain projects
One of the most prominent conversations in Kansas City this year revolves around the Country Club Plaza. HP Village Partners acquired a good portion of the properties in the Plaza in June. Ray Washburne is the president under the new ownership and said more than $100 million will go toward upgrading basic infrastructure and new facades. He plans to bring a grocery anchor back and several local restaurants. Kansas Citians have been optimistic for the Plaza and are hoping this change can revitalize an area that is one of the city’s best attractions.
A controversial discussion in Kansas City this year has been what to do with the Royals and Chiefs stadiums. Missouri voters did not approve the proposed tax funding in April for the Royals to move downtown and the Chiefs stadium renovation. The plan would have displaced too many businesses and created concerns for access and parking downtown.
Kansas legislators then passed a bill to use STAR bonds to fund the project and incentivized the team to move to the Kansas side of the city. Most recently in August, a new plan to move the Royals near Union Station started emerging. Kansas Citians have been very passionate discussing these stadiums and we’re hoping to find a resolution that works best for the entire metro area this coming spring.
The city welcomed a new stadium in the Riverfront district for the national women’s soccer team, KC Current. Developer Port KC opened the stadium in March and in July announced plans for an $800 million development project surrounding the soccer park. This will be completed in phases over the next decade, adding approximately 1,000 apartment units, hotels, office and more retail alongside the Missouri River.
The Kansas River has also been in the spotlight. Developer Flying Truss is planning to open the Rock Island Bridge, the first abandoned bridge in America to become a new entertainment district. The bridge covers 700 feet over the Kansas River and will provide walking access to new restaurants positioned over the water. The project exemplifies Kansas City’s ability to reimagine existing infrastructure and create unique experiences.
As we look forward to 2025, Kansas City has several exciting new events and developments on the horizon. The city has made extensive efforts toward improving transportation; after over two years of construction the KC Streetcar will add an additional 16 stops next summer. Missouri Department of Transportation and the City of Kansas City also completed a $220 million bridge to replace the Buck O’Neil bridge.
We expect the focus on infrastructure will promote new development and allow the city continued growth in the retail and multifamily investment sectors.
Garrett Cohoon is a sales associate with Block & Co. Inc. Realtors. This article originally appeared in the January 2025 issue of Heartland Real Estate Business magazine.