EPC Real Estate Group

EPC's McKeen sees stability in KC multifamily market

By Marcia Charney | MWM Contributing Writer

Stable. Steady. Cautious. Opportunity.

Those are the words Mike McKeen is using these days to describe the state of Kansas City’s apartment market. The principal and president of EPC Real Estate Group, LLC spoke to a record-breaking crowd of more than 150 brokers and real estate professionals at the April meeting of the Kansas City chapter of CCIM

Areas that will continue to succeed in the multifamily market will have “charm, character and are walkable, with jobs in good proximity,” McKeen said, noting that strong players currently include Lenexa City Center, downtown Overland Park, Olathe, Mission; and downtown Kansas City, Missouri, which leads the area in multifamily development. 

The living preferences of Millennials are driving the market. Some of EPC’s current products are Millennial-based, including Avenue 80 in downtown Overland Park, where Millennials comprise 70 percent of the tenant base. Empty nesters, who no longer want to maintain their homes and are seeking to live life a little differently, are another growing tenant segment.  

McKeen discussed how e-commerce is changing multifamily development. With the explosion of package delivery, developers are installing electronic parcel delivery systems, which allow tenants to retrieve packages by entering a security code. McKeen said that without these delivery systems, the buildings would need a massive storage room for delivered packages and staff to monitor receipt and storage.

McKeen said that developers now have to consider for the first time the amenities and unit size that Generation Z wants. He stated that studio apartments are the “quickest thing to fly off our lists right now because they hit a certain price point of affordability but they also cater to that lifestyle of people who spend most of their time playing video games.” McKeen added that the amenity most requested by Gen Z is blackout shades for better game screen visibility. 

McKeen discussed the challenges currently facing multifamily developers which include a decline in the number of skilled craftsmen; the threat of tariffs, causing suppliers to raise prices to offset the impact of possible future tariffs on costs; future tax treatment; the passage of city ordinances which impact the use of development incentives; aging infrastructure; low supply and high demand, particularly for precast concrete products; and rising operating costs.

McKeen also recognized new opportunities for multifamily developers such as the creation of new inventory to meet the demands of Millennials and empty nesters, affordable housing, and opportunity zones. In addition, new product types like micro-units, which range in size from 350 to 500 square feet, are in high demand with rising rents.  

Noting that “site selection is everything now,” McKeen said the average occupancy of multifamily properties in the Kansas City area has remained steady, staying between 93 and 95 percent.  

 

Lenexa's The District mixed-use offers case study on cold-formed steel construction

Construction has hit the midway point for the multifamily portion of The District at City Center, a mixed-use project that adds luxury apartments, retail and office space to the Lenexa City Center development area at 87th Street Parkway and Renner Boulevard. 

The multifamily portion of The District includes 175 units and serves as the region’s first suburban apartment-over-retail project constructed of cold-formed steel. General Contractor Haren Laughlin Construction (HLC) is touting the benefits of the product, which uses prefabricated steel studs to shorten construction times and eliminate on-site labor while improving fire safety during construction and throughout the life of the building.

“The owners wanted to build something that they could sustain for longer than what a wood structure is going to give you, so they brought us to the table and we put together a proposal and really dove into what it was going to take - the parts and pieces - to get this built,” said Matt Fisher, pre-construction manager for HLC. 

HLC, along with design partner Klover Architects, met with potential subcontractors and chose Dahmer Contracting Group led by Dusty Dahmer because its bid was the most competitive and cost efficient. By using an "off-the-shelf" metal stud system, Dahmer said his team was able to tighten the margins so the project made financial sense for co-developers Copaken Brooks and EPC Real Estate Group. 

“The difference between wood and metal framing used to be a bigger spread, and the market’s gotten so much more efficient, so now the difference is a lot smaller,” Dahmer said. “There was a steep learning curve at the beginning of the project, but now we are cruising." 

Reuben Hamman, HLC project manager, said steel framing makes for a safer and cleaner construction site.

“It’s a lot safer product to install because everything we are building is off of a slab, so we are not three stories in the air in a multifamily area swinging stuff around,” Hamman said. “On the job site, it’s just metal and concrete, so there’s not much to clean up. The waste has been minimized and everything we do throw away is recyclable.”

Because cold-formed steel is still more expensive than wood, it isn’t likely to overtake traditional wood framing, but HLC Vice President Jeff Wasinger believes there’s plenty of potential for growth in higher-end multifamily construction.

“We think for a small premium, apartment developers get a longer lasting, better quality, safer structure,” Wasinger said. “The end result is going to be above everyone’s expectations.”

In additional to luxury residential apartments, The District adds 45,000 square feet of office and 35,000 square feet of retail space to the existing 800,000-square feet of developed space at Lenexa City Center. 

The full project team includes EPC Real Estate Group and Copaken Brooks, co-developers; Klover Architects, architect; Studio A Architecture, residential consultant; BSE, structural engineer; Latimer Sommers & Associates, mechanical design; Phelps Engineering, civil engineer- private; and GBA Architects + Engineers, civil engineering- public. John Coe and Ryan Biery of Copaken Brooks are handling the leasing for the District. 

Panelists tackle trends and timely topics at sold-out MWM 2017 Multi-Family Summit

More than 170 guests attended MWM's 2017 Multi-Family Summit on Oct. 12 for breakfast, premium networking and a panel discussion moderated by Hunt Midwest's Brenner Holland

Here's a snapshot of panelist insights: 

“We are in a vibrant stage in my 25-year career. One of the leading indicators is the number of calls I get from lenders about sites from developers outside Kansas City, so that tells us that folks are either pooping out in some other markets and trying to come here, or they’re moving from different food groups into multi-family." -Jim Thomas, Cityscape Residential

“I think what has happened in Denver is similar to what has happened to California, where the prices have gotten astronomical and it’s unaffordable for virtually anybody at any income level... Quite honestly, I see Kansas City as the next Denver as people keep looking for more affordable places to live and work. We are certainly very well priced in the market for exceptional value.” -Aaron Rumple, Yaeger Architecture

“Boomers want larger units and more bonus space or an extra den area. Storage is very important to them. Millennials, on the other hand, are more concerned about walkability. They value space a little less and they place more value on amenities and the social aspect of amenities spaces in technology.” -Justin Duff, VanTrust Real Estate

“The amenity stuff keeps getting better and better, particularly with pools and clubhouses. On the technology side, we’re adding USB outlets inside the units and trying to accommodate what’s going to be standard technology as it grows. We’ve built penthouse units for a couple of projects. Those are the first to go, and usually the Boomers get them." -Aaron Neighbors, Neighbors Construction

“The new stuff is always going to fill up, and the reason is that those offer the best property and best amenities. It’s where people want to live. So we are building in places where the jobs are going, and then it’s not a question of ‘Will the new stuff fill up?’ It’s a matter of, ‘At what number will it fill up? Will you meet the pro forma, and will you hit your rents?' " -Aaron Mesmer, Block Real Estate Services

“Paramount to any development is having the best site selection-- access to highways, jobs and amenities-- because when people move into an apartment anymore, there are so many good options out there, you really have to have that ‘wow’ factor. So you need to be able to have people move into something where there’s a sense of place and they have to feel that they have 'arrived' somewhere.” -Mike McKeen, EPC Properties

“I think Kansas City-- the municipality-- really wants to expand opportunities for economic diversity. A lot of projects that we are seeing in the Historic Northeast area are all mixed-income products, so you are divvying up affordable versus market rate and really bringing more diversity into the neighborhood.” -Rachel Treanor, 4Sight Construction Group

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The District at City Center seeks to fill void in Lenexa's office and retail market

Construction is officially underway for The District at City Center, a mixed-use project that brings additional luxury apartments, first-class retail and full-floor office space to the Lenexa City Center development area at 87th Street Parkway and Renner Boulevard.

The District will add 175 luxury residential apartments, 45,000 square feet of office and 35,000 square feet of retail to the already successful Domain apartments and the recently opened Lenexa City Hall and Civic Campus.

Designed to complement the existing 800,000 square feet of retail, office and recreational mixed uses at Lenexa City Center, The District will fill a unique void in the Lenexa office and retail submarket with full floor offices for 5,000 square foot tenants plus much-needed first class retail space, according to Keith Copaken of Copaken Brooks.

“We are well underway with the District and City Center, as well as Lenexa as a whole, and are really hitting on all cylinders right now,” Copaken said.  “I’m not sure you could find a more exciting and active area in the Kansas City metro area right now.”

The District is scheduled to open in March of 2019 and is being co-developed by longtime Kansas City office and retail developer Copaken Brooks and residential lifestyle development firm EPC Real Estate Group.

“EPC is thrilled to create another development that provides convenience, connectivity and community. The District is located in a prime location adjacent to restaurants, office, the Public Market, and the Lenexa Civic Center just to name a few. People love the ability to be a short walk or drive away from an experience,” said Brendon O’Leary, EPC Real Estate Group vice president of development.

At the District's groundbreaking on Tuesday, Copaken thanked the City of Lenexa for serving as a valued partner: “None of this would be possible without the foresight, guidance and determination from the City...  Lenexa has been a great development partner in every sense of the word and every step of the way.”

Lenexa Mayor Michael Boehm said it is gratifying to watch a long-time dream take shape. 

“We could not be more pleased with all the development activity in the City Center area. It really has become what we and the community originally envisioned - the city and civic hub of the City of Lenexa,” Boehm said in a release. 

The District at City Center officially broke ground on Tuesday, September 19.

The District at City Center officially broke ground on Tuesday, September 19.

The project team for The District at City Center Lenexa includes: Copaken Brooks (Co-developer, office leasing agent & property manager), EPC Real Estate Group (Co-developer, apartment leasing agent & property manager), Klover Architects (architect), Studio A Architecture (residential consultant), BSE (structural engineer), Latimer Sommers & Associates (mechanical design), Phelps Engineering (civil engineer - private), GBA Architects Engineers (civil engineer - public), HarenLaughlin Construction (general contractor), Richard Clayton Barrett (landscape design) and Lewis Rice (legal).

For more information about The District, email Ryan Biery at rbiery@copaken-brooks.com. Or check out more about the project here

Multifamily projects create tipping point for Downtown Overland Park office development

JONNA LORENZ | Contributing Writer

Downtown Overland Park redevelopment got a shot of adrenaline this week with news that Freightquote.com founder Tim Barton plans to develop a 130,000-square foot office tower on a site that includes the Overland Park Presbyterian Church near 81st and Marty streets.

Longtime Kansas City broker and developer Jim Harpool of Evergreen Real Estate Services helped Barton assemble the land, which amounts to almost a full city block. Harpool said the office project arose in response to an uptick in luxury multifamily and mixed-use projects under construction downtown Overland Park.

“Millennials look for a place to live first, and then they go look for a job. They want to work wherever it is cool and where it’s happening,” Harpool said. “We’ve had some office users who have called us and said, ‘Hey, I’m located in an office park, and there’s nothing to walk to, and we can’t get Millennials to come and work for us.' "

"Everything is really going fantastically," Mayor Carl Gerlach said of several mixed-use projects that are "building the density downtown which we were looking for in the Vision Metcalf plan" adopted in 2007.

Over the next two years, a total of four new developments are set to bring more than 500 new apartment units, an estimated 22,000 square feet of retail space and over 17,000 square feet of office space in Downtown Overland Park. 

On April 4, Hunt Midwest Residential Development officially broke ground on The Vue high-end mixed-use project just steps away from Barton’s planned office tower. Located at the southeast corner of 80th and Marty streets, The Vue will include 219 luxury apartments, 10,000 square feet of retail space, and a structured parking garage.

Leasing for The Vue won’t begin for at least another year, but three other multifamily projects are set to begin welcoming residents throughout 2017:

•Residents will begin moving into InterUrban Lofts at the southwest corner of 79th and Conser streets beginning April 29. Developed by Real Property Group LLC, InterUrban Lofts includes 41 residential units, 7,500-square feet of office space, and a 54-space parking garage.

•Completion is expected in August for Avenue 80, a five-story project being developed by EPC Real Estate Group LLC. Located at the southwest corner of 80th Street and Metcalf Avenue, Avenue 80 will offer 220 residential units, 10,000 square feet of office space, 7,000 square feet of retail, a courtyard and parking garage.

Market Lofts, developed by Goehausen & Co. at northwest corner of 80th and Marty streets, is scheduled for completion in the late fall. It will offer 36 residential units, 5,700 square feet of retail space and two levels of parking.

In February, representatives from those projects participated in a panel discussion hosted by the Downtown Overland Park Partnership, discussing everything from the status of their projects to amenities and public parking in the area. The area's charm and character, unique shops and urban environment were among the draws.

"We're excited for the new foot traffic and to introduce this really one-of-a-kind area to so many new faces," said Kate Sweeten, executive director of the Downtown Overland Park Partnership. 

Public art including and other aesthetic improvements will encourage people to get out and explore what the downtown area has to offer. Such perks will complement the area's unique businesses that appeal to people with interests ranging from quilting and beading to culinary skills and home brewing, Sweeten said.

The development will benefit the city's farmer's market and the annual fall festival, Mayor Gerlach said. Time will tell whether future development will include bringing a grocery store back to the area, but with Barton's acquisition of a full square block downtown, there is renewed optimism 

"It would be great if there could be a small neighborhood specialty market in the area," Gerlach said.