It’s a good year to be in Kansas City. With each sector making impressive moves in 2015, CBRE’s Kansas City office is predicting just as strong of a 2016, with a few nuances. Here’s a look at the real estate firm’s predictions for the coming year.
Kansas City’s top submarkets are hurting for more large blocks of Class A space, as evidenced by the climbing office occupancy rates. The lack of speculative office space has been a significant factor in lowering vacancy rates, the report notes, especially in South Johnson County and at the Country Club Plaza. While a handful of multitenant construction projects are on the horizon in 2016, none are truly speculative, as they will require significant preleasing prior to the start of construction.
This year, CBRE predicts asking lease rates will remain steady or see modest growth. Projects on the way include the 193,732-square-foot 46 Penn Centre on the Plaza, and the 142,717-square-foot historical conversion of Corrigan Station. The Dairy Farmers of America also have a new 100,000-square-foot headquarters building underway in Kansas City, Kan.
The border war over incentives will continue to play a significant role in luring companies back and forth across the state line, unless a bill that prohibits the use of state incentives to attract Kansas City area companies is successfully passed through the Kansas Legislature. However, some community leaders believe that restricting incentives will dampen Kansas City’s competitive edge over other parts of the country, and could lead major area employers to leave Kansas City altogether.