Tweeting, Newton’s third law of motion and pumpkin spice Doritos aren’t exactly what you’d expect from an economic forecast, but all three were relevant subjects in a recent presentation by Ted Jones, chief economist and senior vice president of Stewart Title. Jones offered his predictions for the real estate market in 2017 to members of KCRAR Commercial.
As the real estate industry consolidates, end users are continuing to standardize and centralize processes including their real estate transactions. While thirty years ago, there might be 50 brokers who knew the Kansas City market inventory, today it seems there are half a million brokers who know 90 percent of their market knowledge from CoStar. So how does the local broker bring value to the end user?
With 18 years of experience within the Kansas City Area Development Council, Tim Cowden is following in the footsteps of Bob Marcusse as he embarks on his new role as CEO of the organization.
Price Commercial Realty is finally going public with its plan for a massive new 300-acre mixed-use development in south Kansas City. BluHawk is the name for a 100-million-square-foot new retail power center that will occupy a stretch of land situated between 159th and 167th street, bordered by Highway 69 to the east and Antioch to the west.
It’s the southernmost development in Kansas City, with a population of about 40,000 in a three-mile radius. John Nolan, president of Price Commercial Realty, says the questions he gets most often are whether the area is ripe for development and just how much it’s expected to grow.
It’s an easy answer for Nolan, who presented details of the BluHawk plan to members of KCRAR Commercial on Wednesday. He responds by plotting its location on a map: Not only is it a short 3.5 miles south of Prairiefire and Corbin Park, the hottest retail areas in the market, but it’s surrounded by high quality $500,000 homes, some of the top ranked schools in the country with Blue Valley schools, and in a 3-mile radius, an average household income of about $150,000.
“At different ICSC events, we spoke with groups out of L.A., San Francisco and Washington D.C. and asked whether they saw numbers like that, and everyone’s response was that they’d be happy to have those numbers at any development,” he said. “We view that as an amazing opportunity.”
And there’s plenty of room for growth. Nolan said the City of Overland Park is looking at more than 500 homebuilding permits issued per year for $500,000 homes. BluHawk will help foster that single-family home growth. It’s currently sold all 60 home lots in its first phase of the plan, and the majority of those homes – about 55 – have already been built. Another 60 homes will come in another phase, and it will include a mix of town homes and villas and other options that have yet to be defined.
Because it’s a STAR bond project, Nolan said the developers are taking a new approach to attracting tourists. So, instead of first focusing on retailers, they want to create a sense of intrigue and excitement around the plan’s two main centerpieces: a 6,000-seat hockey arena and an 60,000-square-foot extension of the Hutchinson-based Cosmosphere.
“We got together and what we decided to do with BluHawk is create a reverse interest in the area,” said Scott Buescher, vice president of acquisitions and development for Price Brothers. “We’re not going for retail first; We’re going for programs.”
The Cosmosphere located in Hutchinson is the largest non-government affiliated space entity/museum in the world. Although it’s a truly fascinating facility, attendance is falling. Because of that, Price brought in two former Disney employees, who will pack the facility with programming utilizing the building’s 40X theater, a Legos robotics system called Mindstorm, and other technological and educational components.
For the hockey arena, the team is in negotiations to bring a U.S. Hockey League team to the arena as part of a larger concerted effort to get 20,000 Kansas City kids in the metro to play hockey.
“There’s an underlying interest here,” Nolan said. “The purpose of the hockey team is to create a movement in Kansas City much like soccer did with the Legends facility.”
With the hockey arena and Cosmosphere in place, Nolan said the team is working to bring first-to-market retailers to the area. So far, he’s received commitments from a new-to-market movie theater/bowling alley, and plans to add a number of restaurants.
But the first piece to open in the development will be the portion dubbed BluHawk Marketplace. It will house the newest 60,000-square-foot Cosentino’s concept, a much larger and more technologically advanced than any its similar versions in Brookside and downtown Kansas City. The store is scheduled to open around Thanksgiving this year. An additional 70,000 square feet of retail surrounding the grocery store will also be the first part of the development to open.
So far, other pieces of the plan include a small plot of land that was sold to an area bank, as well as three or four other large parking garages.
Click here to see a full site plan.
The local chapter of KCRAR Commercial is shuffling the way it decides which member of the brokerage community deserve its highest annual awards. KCRAR Commercial Vice Chairman Tom Houts of Cushman & Wakefield described the changes the committee was making at the KCRAR Commercial annual awards ceremony, held last week at Populous’ new space at 4800 Main St.
“It’s amazing the animosity and pushback you receive from collecting this data. The committee was wondering why we were pushing something that people were resisting? We made a decision at that point to change this. We get it that not everyone wants to list out their deals. Starting today, we’re going to look at more holistic volumes and the complexity of deals,” he said. “Moving forward, we’re going to take the burden off the brokers of submitting numbers, and their deals, and really put it on the awards committee. They’ll analyze data and figure out the appropriate winners.”
This year, seven brokers from five area brokerage houses took home top honors in their respective categories. Here’s a look at each of the winners.
The top volume dealmaker of the year in the investment world was Jeff Stingley of CBRE. Stingley had a capstone 2015 year with a total transaction volume of $480 million. But his favorite statistic of the year represents the fact that half of his transactions in 2015 brought a new owner to the market.
“I think it shows the desirability of Kansas City as a market for these guys to place millions of dollars of investment in. They don’t do that lightly. They do due diligence and they like what they see,” Stingley said.
All in all, the Kansas City market saw $950 million in total transaction volume for the year, and because some deals manage to sneak under the rug, he feels completely confident calling Kansas City a billion dollar market. Compare that to cities like Twin Cities, which also had a billion dollar year but is double the size of Kansas City. St. Louis, in comparison, brought in $650 million in deals while Cincinnati saw roughly $350 million.
The retail volume dealmaker of the year went to David Hickman of CBRE, who completed more than 2 million square feet worth of transactions in 2015, including the sale of Metro North Mall and an 88,000-foot-lease with AMC.
“Nothing is accomplished without a great team of coworkers at CBRE KC retail department, and the unbelievable network of talented retail brokers in KC that I shared many transactions with in 2015,” Hickman said in a statement.
In the industrial world, Whitney Kerr Jr. of Cushman & Wakefield took home the award for top volume, having completed some of the largest industrial transactions in the city in 2015.
Greg Swetnam of Kessinger Hunter took home the top volume award for the office category, thanks to his involvement in one of the largest renewals at the Country Club Plaza and in Crown Center.
“As most of us know, it’s all about relationships,” Swetnam said. “We do a lot of transactions, but it’s really a transactional business around a relationship.”
The KCRAR Commercial annual Rookie of the Year award is an award based upon production, community service, ethics, education, and contribution to the local association. The award winner, Matt Ledom of Block Real Estate Services, began his career in 2013 as an investment sales specialist — or as Ken Block calls it, “Probably the hardest thing you can do.” To date, Ledom has been involved in the sale of more than 400,000 square feet of commercial space worth more than $43 million.
But it wasn’t always easy. Ken Block says he and other company leaders would give Ledom pep talks, encouraging him to arrive to work early, leave late, make a lot of calls and relationships, and promised him he’d get the hang of it.
“Let me tell you what I think,” Block said. “The guys that have luck are the people that put themselves in that position by hard work, by dedication, and by being in a place to be lucky. You don’t get lucky if you’re not working. He kept at it with a lot of dedication and I have to tell you, he got lucky.”
The next award on the docket, the Roger Cohen Salesperson of the Year award went to Michael Sonnenberg of NAI LaSala-Sonnenberg Heartland. The criteria is based upon an exceptional record of ethics, cooperation with fellow brokers, contributions to the association. Sonnenberg, a partner with the firm, has served as a commercial realtor in both Kansas City and St. Louis and has been involved in more than $100 million worth of transactions in office, medical office, and retail sales.
Finally, Pat McGannon of Kessinger Hunter took home the Allen J. Block Broker of the Year award. Named in honor of an icon of the local brokerage community, the award highlighted McGannon’s career, which began in 1994 and now entails overseeing the industrial arm of 8 Kessinger Hunter brokers who handle leasing and sales for more than 9 million square feet of industrial properties in the Kansas City area.
Get the scoop on the next upcoming networking events with KCRAR Commercial and other groups by visiting our event calendar.