2019-07-12_DTZ戴德梁行_Industrial_Q3_2018_Kansas_City_4页_715kb

MarketBeat Summary: Industrial Q3 2018 - Kansas City

Core Content

This document provides a comprehensive overview of the industrial real estate market in Kansas City during the third quarter of 2018. It highlights economic indicators, market activity, key lease and sales transactions, and submarket performance, offering insights into the current and future state of the market.

Main Economic Indicators

• Employment: Increased slightly, indicating a healthy market.
• Unemployment: Continued to decline, reflecting strong economic activity.
• U.S. Unemployment: Also declined, showing broader economic strength.

Market Indicators (Overall, All Classes)

• Vacancy: Declined, suggesting improved demand.
• Net Absorption: Slightly lower than Q3 2017, but still strong.
• Under Construction: Decreased, indicating a more stable market.
• Rental Rates: Slightly decreased, but remain relatively stable.

Note: Rental rates reflect gross asking $psf/year.

Market Overview

• The third quarter was relatively quiet in terms of deal activity.
• Annual Net Absorption: Already at 4.7 million square feet, likely to be the second highest in Kansas City history.
• eCommerce: Continues to be a major driver of industrial demand, with Overstock.com leasing 326,000 sf in Wyandotte County.
• New Development: Developers are moving forward with new construction, particularly in Northland Park and Cass County.
• Submarket Trends: Riverside is nearly built out, while other submarkets show continued growth.

Outlook

• Build-to-suit Deliveries: Expected to boost annual absorption above 6.0 msf.
• Infrastructure Improvements: In Edgerton, KS, enabling Kubota Tractor to start construction on a 1.0 msf facility.
• Development Trends: Focus shifting to smaller (300,000–500,000 sf) buildings, while demand for 100,000–400,000 sf spaces remains strong.

Bulk & Modern Distribution by Submarket

• Johnson County: Holds over half of the bulk distribution inventory, with a vacancy rate of 9.1%.
• Wyandotte County: Strong absorption with a vacancy rate of 4.6%.
• Executive Park / Northland Park: Active submarket with a vacancy rate of 5.4%.
• Jackson County: High absorption, with a vacancy rate of 5.6%.
• North Kansas City: Higher vacancy rate of 6.8%.
• KCI: Low vacancy rate (7.0%) but negative net absorption.
• Cass County: Very limited inventory and activity.
• Riverside: Nearly built out with a vacancy rate of 9.0%.

Key Lease Transactions Q3 2018

Key Sales Transactions Q3 2018

Conclusion

The Kansas City industrial market in Q3 2018 showed signs of continued growth, despite a quieter quarter in terms of deal activity. eCommerce remained a key driver, and new development is picking up, especially in Northland Park and Cass County. While the market has not reached the peak levels of 2017, the pace of absorption and construction remains robust. The Federal Reserve's rate hikes and the overall economic environment suggest a stable but cautious market outlook.