The industrial market in Kansas City remains red-hot, with absorption and construction driving a strong commercial real estate market ever forward. But when you look beyond the basic data and study the deals a bit more closely, what trends can we see? We dissected the 23 largest deals in the market from the first half of 2019 to get a closer look at the market, and here’s what we found:
- KCMO saw the most action, but Edgerton saw the biggest deals.
KCMO led the way in industrial leasing in the first half, with six of the largest 23 deals totaling just under 600,000 sf. But thanks to two mega-deals (Hostess and Smart Warehousing), Edgerton led in terms of total square footage at 986,621 sf. Other popular markets included KCK and Riverside
- Moving remained a popular option.
Very few of the largest deals were renewals. Only four totaling 435,280 sf involved the tenant staying put, while 19 deals tallying 3.9 msf were new leases involving either a move or an expansion. That shows the continued push for new, efficient space in the industrial sector, both through build-to-suit and speculative construction.
- Johnson County was the leasing epicenter.
Of all Cushman & Wakefield’s tracked industrial submarkets, Johnson County is the largest, but its share of leasing activity surpassed its share of the market by a healthy margin. The submarket has about a third of all multitenant industrial space in Kansas City, but pulled five of the 23 largest deals totaling 1.67 million square feet (msf), nearly half of what we tracked for the first six months of the year. The next submarket, Riverside, was more than 1 msf off.
- The food and beverage industry ate up space.
More than a third of square-footage absorbed in the 23 largest deals (1.46 msf) was leased to food and beverage manufacturing companies, which were spread out over five deals. The next-busiest industry in terms of square footage was companies providing an administrative or support function, while metal manufacturers and merchant wholesalers were a little farther down the list.
- Distribution remains the popular building type.
19 of 23 deals were in warehouse or distribution buildings, totaling 3.78 msf. Manufacturing facilities were the next most popular, with three deals totaling 218,592 sf. Only one deal of the 23 tracked was for an office/flex building.