Kansas City on pace for record commercial real estate growth in 2021
On Monday, Colliers International (NASDAQ, TSX: CIGI), a global commercial real estate management company, announced the construction of a 167,000-square-foot cold store in Liberty, Missouri.
The deal is notable because it continues a hot phase for the Kansas City area, which has seen a boom in commercial real estate over the past year, both in terms of companies that build facilities and companies like Colliers that make buildings build without a tenant.
“The Kansas City area is one of the few markets in the United States where cold room specifications are being proactively built. This new facility provides businesses with a go-to-market solution to meet consumer demand, ”said Elli Bowen, vice president of KC SmartPort, a regional economic development group in the region that focuses solely on commercial development. “Kansas City’s central location, low cost of ownership, infrastructure network, and available specification space continue to position the Kansas City area as a hub for food and beverage businesses.”
John Stafford, executive vice president of Colliers Kansas City, said the area offers cold storage opportunities, partly due to the growth of e-commerce.
“The building will be specifically designed to meet the unique needs of cold store users to meet the demand primarily associated with the growing food and beverage industry. and consumer expectations for fast service, ”he said.
When the groundbreaking officially takes place this July, Colliers will join a growing list of companies building or opening facilities in the area, including Chewy, Urban Outfitters, and Amazon (NASDAQ: AMZN), which are building two facilities in the area. Upon completion, Amazon will have 10 facilities in the area, spanning more than 4 million square feet. Chewy opened its 796,000-square-foot facility designed for e-commerce fulfillment last year.
Other notable projects include NorthPort Development, which is building a 1 million square meter facility; Hunt Midwest, which is building a 700,000 square foot facility; and Scannel Properties, for which separate projects totaling more than 5.5 million square feet are planned.
Chris Gutierrez, president of KC Smartport, told Modern Shipper that the trend of companies looking to the region started about 10 years ago but has accelerated during the COVID-19 pandemic. Bowen added that approximately 90% of the space to be built will be rented prior to construction. In 2020, more than 8 million square meters of new space was delivered and 16 million square meters, all new space, was under active construction. KC Smartport expects around 15 million square feet to go online in 2021, a record of a year for the region.
“Chris and I are always on the ground, talking to developers and partners and pushing [develop new space]”Bowen said, noting that over 2.5 million square feet were shipped and 9 million square feet under construction in the first quarter.
According to Bowen, KC Smartport, which helps simplify the business of recruiting new businesses and connecting with home builders and government leaders to move projects forward, launched 12 stores in 2020, most of which focused on e-commerce focus. However, there has been a shift this year as more food and beverage companies, including manufacturers, sought space in the region.
Bowen added that one of the attractions is the region’s central location – 85% of the country can be reached in two days or less – but also access to all four modes of transport. Gutierrez noted that a new air terminal opened ahead of schedule in Kansas City, and Amazon has just added a new air freight service to the city. Companies also have easy access to rail services and even ship movement along the Missouri.
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The region is also investing in its infrastructure. Kansas passed a 10-year transportation bill just before the pandemic began, and Gutierrez noted that Missouri law passed an increase in fuel tax to pay for transportation. This bill is waiting for the governor’s signature.
“We’re seeing this really balanced approach to growing the region,” said Bowen. “The region is very proactive [about] Overplanning our transportation. “
While KC Smartport speaks to prospective companies, Gutierrez said inquiries keep coming, including higher ceiling heights to support warehouse automation and vertical builds, as well as speed to market. Most companies want the facilities up and running within six months.
The other big question, as in other regions of the country, is a skilled workforce. With so many facilities in the region, the question is whether there are enough workers. Bowen said there is a lot.
“I’m not going to say we have an abundance of workers because no region does, but what that region has done is to be very proactive [about training workers]”She said.” This has been happening in the Kansas City area for years. Great efforts are being made to remove barriers to the workforce [such as child care and training scholarships]. ”
Gutierrez said there doesn’t seem to be any slowdown in activity in the area as builders are planning new space as early as 2022.
“We are not in the last [inning] of the game; There are lots of opportunities to build there, ”he said.
Click here for more Modern Shipper articles by Brian Straight.
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