While core industrial markets continue to thrive, Colliers International’s latest research report—10 Emerging U.S. Industrial Markets to Watch in 2017—explores the markets positioned to experience the most robust increases in demand from occupiers and owners. Learn more about one of these markets: Kansas City.
“The Kansas City market continues to become an emerging power as a result of its location, superior infrastructure and business-friendly foreign trade zone program. Kansas City is home to the largest rail center in the United States by tonnage and is located at the middle of the East-to-West corridor and the route from Mexico to Canada. Four interstate systems converge upon Kansas City, resulting in more freeway-lane miles per capita than any other U.S. city, while allowing goods to be delivered to 85% of the nation’s population within two days.” — D. Edward Elder, President | Kansas City
Kansas City’s central location and multiple intermodal operations allow the growing e-commerce and distribution sector to quickly deliver goods. Amazon invested heavily in the Kansas City market in 2016 with the announcement of three large deals, just two years after initially entering the market.
The Logistics Park Kansas City (LPKC), located adjacent to a BNSF Intermodal Facility, continues to grow and attract tenants at an unprecedented pace for the market. LPKC delivered more than 3.1 million square feet of industrial product in 2016, with more than 2.7 million square feet of that product already accounted for by tenants.
The overall vacancy rate in Kansas City climbed to 6.9% in 2016. The vacancy rate continues to rise as a result of the significant amount of speculative development delivered in 2016. Completed project totals continue to outpace absorption figures in the near term, but will likely begin to stabilize in the upcoming quarters.
At 6.1 million square feet, net absorption in 2016 crushed the previous annual record of 4.4 million square feet in 2007.
At year-end 2016, construction completions reached an all-time peak of 7.9 million square feet. The future pipeline remains full for development opportunities across all metro submarkets, so expect construction activity to remain elevated throughout 2017.
Asking rates have risen slightly relative to previous quarters and years, but have remained relatively steady as a result of strong development and a temporarily higher amount of vacant space.
To learn more, explore the 10 Emerging U.S. Industrial Markets to Watch in 2017.