IRR-Kansas City Mid-Year Viewpoint 2015 Local Market Report - Office
The Kansas City office market continued to improve with modest growth in rental rates decreased vacancy rates and increased absorption into 2015. The suburban office submarkets continued to outperform the CBD in terms of rental rates and vacancy, but the ongoing downtown streetcar project coupled with continued development in the CBD give reason for optimism in the future. Of these continued developments along the streetcar line, the recently proposed redevelopment of the Corrigan Building into office space is a positive indicator for the area.
The redevelopment is projected to bring hundreds of jobs to the CBD over the next several years. The most notable office developments elsewhere in the metro is Cerners 10 year Three Trails project which should commence before 3rd quarter. It which calls for 4.7 million square feet of construction in 16 buildings on 290 acres. We note the redevelopment of the 650,000 square foot Overland Park International Trade Center into office space.
The 70,000 square foot Pinnacle V building broke ground in late 2014 in the South Johnson County submarket and is set to be completed this year. The Sprint Campus is approximately 3.9 million square feet located in the South Johnson County submarket and is one of the primary demand drivers in the Kansas City Metro. In late 2014, Sprint announced cost cutting measures in the form of layoffs and local investors/office users are keeping a watchful eye on the situation. Sprint has put sublease space on the market over the past 90 days. We anticipate continued growth and improvement in the Kansas City office market in the coming months, but keep a watchful eye on the Sprint World Headquarters Campus.
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IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.