Wichita has been experiencing a strong downtown revitalization that has brought construction of new and redeveloped office, retail and mixed-use projects throughout its urban core over the past few years. Two years ago, companies began relocating downtown as shifting workplace demographics incorporated close proximity, “live, work, play” amenities in order to grow their businesses as well as attract and retain talent.
Today’s businesses are seeking modern Class A finishes within Wichita’s center where these types of environments exist or will be available in the near future as developments continue.
Fred Elmer, Occidental Management
Downtown revitalization
In the early 2000s, downtown Wichita lost many of its office users to more suburban office developments on the east and west edges of the city, leaving high vacancy rates and rendering many downtown office buildings functionally obsolete. Now this trend has reversed after the Wichita Downtown Development Corp. put together a comprehensive master plan to revitalize the urban core.
Developers purchased key catalytic sites and repurposed them into economic drivers for downtown as shifting demographics brought about the need for businesses to attract and retain top talent with both onsite and walkable amenities.
Devan Horning, Occidental Management
As new office projects downtown are beginning construction and being completed, the idea of relocating to Wichita’s central business district (CBD) has become more appealing to companies such as Cargill Protein, Meritrust Credit Union, Martin Pringle Law Firm, Alloy Architecture, Hutton Construction and IMA Financial Group, to name a few.
Over the next few years, downtown Wichita can expect to see the completion of over a dozen larger developments bringing approximately 730,000 square feet of new office space. In addition, new mixed-use projects like the proposed Riverfront Legacy master plan will activate new downtown amenities along the Arkansas River.
Since 2018, Wichita’s downtown office occupancy growth has outpaced the city’s overall occupancy growth of 3.3 percent with a full 4 percent increase bringing the number of occupied CBD office space to 1.7 million square feet. After Wichita’s 2019 occupancy numbers were released, it is clear that there is now more of a demand for office space than in previous years, as downtown office space occupancy grew to 87.6 percent with market rates in the $18.44 per square foot range.
Although Wichita’s downtown office occupancy is growing, it is mainly due to the relocation and growth of current companies within the city as opposed to new businesses entering the market. However, as the need for newer Class A office space is on the rise, developers have been able to meet the demand by either redeveloping older buildings or building completely new offices. One major project that has recently helped shape downtown is Cargill Protein’s newly built, 200,000-square-foot headquarters. Fidelity Bank has also begun construction on its 152,000-square-foot building with 17,000 square feet of retail space on the main floor.
In addition to these new construction projects, developers are actively working to repurpose and reposition some of downtown’s older buildings into new and useable office space. For example, the redevelopment of an old fire station has given the building new life as a 15,000-square-foot coworking office space. Another example of a Wichita developer reutilizing an outmoded building is the Ice House at Union Station. Originally built in 1901, the Ice House is currently being redeveloped into a 38,000-square-foot Class A office building where tenants will be able to enjoy modern finishes with outdoor patio amenities.
In addition to these projects, another 27,000-square-foot building was recently purchased and will undergo renovation to transform an old antique mall into a Class A office building. The largest challenge now is the lease-up time to occupy these new office projects with tenants who will then be able to support new employment.
What’s driving growth
Since 2010, Wichita’s downtown population has been steadily growing and driving the demand for new housing in the area. Over the past 10 years, approximately 1,228 residential units have been completed with more than half of these being built since 2016 and an additional 2,000 or more units being planned over the next five years. In addition to the urban growth, living in downtown Wichita has become more and more appealing over the past few years with the introduction of a new minor league baseball team, The Wichita Wind Surge, and the construction of its new $75 million stadium along the west bank of the Arkansas River, which has recently been announced as Riverfront Stadium.
Although Wichita’s new baseball team has been a huge talking point among those investing in the downtown area, the main topic of discussion has been what the city is calling the Riverfront Legacy master plan, a 55-acre mixed-use development featuring retail, office and residential components with the city’s convention center, Century II, as the focal point. In total, the entire project is expected to cost $1 billion, which will be financed through public and private investment capital.
The third aspect of Wichita’s downtown lifestyle is where residents are spending their dollars in the city’s CBD. With an estimated population of 2,750 residents within a 2.5-square-mile area and $163 million spent within the area, it is clear why many of these developers are opting for the mixed-use concept when building their projects downtown. One major mixed-use development is Occidental Management Inc.’s redevelopment of the historic Union Station campus featuring 140,500 square feet with a mix of Class A office, restaurant and retail space.
Just west of the Union Station development is another newly opened mixed-use project. Landmark Commercial’s 70,000-square-foot Spaghetti Works project features a mix of office, retail, apartments and outdoor greenspace, offering an element that has long been scarce in Wichita’s downtown area.
The new Riverfront Stadium is attracting additional office, multifamily, restaurant and retail users to the Delano neighborhood as well. Delano connects the CBD to the west bank and is a small lively neighborhood where urban core and local vibes meet in the middle. In Delano, multiple new projects are helping the area grow in unison with that east of the river in a cluster the city is calling Delano’s catalyst site.
Among these projects is Hutton Construction’s $5 million investment to build its new 24,000-square-foot headquarters. In addition to Hutton’s new head office, EPC Group plans to develop a new $40 million mixed-use project featuring apartments, a hotel and a public greenspace for residents and other Wichitans to enjoy. Other projects bringing an improved live-play atmosphere to the area are the new River Vista Apartments, Wichita’s new Advanced Learning Library and the announcement of a ballpark village to be built just north of the new Riverfront Baseball Stadium.
With approximately $655 million invested into the downtown area since 2010, and an estimated $1 billion+ in the next 10 years, developers are actively working to expand the city’s urban core into a market where existing companies can grow their businesses as well as help the city attract new companies to the Wichita area.
— By Fred Elmer, Sales and Leasing Agent; and Devan Horning, Marketing Manager and Brokerage Coordinator; Occidental Management Inc. This article was originally written for the May 2020 issue of Heartland Real Estate Business magazine.