Lenexa City Center

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.  

 

MetroWire Media's top themes of 2018: Push, Pivot, Preserve

Wichita developer sets sights on upscale office park near Lenexa City Center

Wichita-based Vantage Point Properties has entered the Kansas City market, announcing plans to develop Reflections at City Center, a sprawling Class A office complex in Lenexa.

"Our vision is to create an environment that is both aesthetically and functionally different from any other office park in the Kansas City area," said Paul Jackson, president and founder of Vantage Point Properties. "Every detail - walkable paths, architectural lighting, and sculptures - will come together to create a comfortable, enjoyable place to work."

The commercial real estate company just closed on 32 acres at I-435 and Renner Road and envisions a walkable, upscale 315,000-square foot campus featuring reflection pools and three restaurants. The Lenexa City Council has approved tax increment financing for the project, which will break ground pending identification of an anchor tenant. 

"The project will provide a unique opportunity for a company to come in and make the site their own," Jackson said. "They will really be able to create their own footprint here. We're ready to make a deal happen with the right partner."

Jackson, who co-founded Vantage Point Properties in 1992, sees opportunity in the relatively stable Kansas City market.

"It has a track record of steady growth," Jackson said. "And Lenexa is the perfect spot for our first project."

Matt Stover and Tracy Wilson of Colliers are marketing the property for lease. 

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. 

Lenexa Civic Center is main dish at October CREW KC luncheon

Construction and project updates for Lenexa’s landmark $75 million, 200,000-square foot Civic Center development were on the menu at CREW KC’s quarterly luncheon, with project managers from the City of Lenexa, PGAV Architects, JE Dunn Construction and CBC Real Estate Group offering insight into everything from design challenges to project timelines.

Beccy Yocham, City of Lenexa director of community development, provided an overview of the multi-use project at 87th Street and Renner Blvd. In July, the new City Hall and Recreation Center opened, followed by the Lenexa Public Market in September. By the end of the year, construction will begin on a new branch of the Johnson County Library, as well as a $22 million Shawnee Mission School District aquatic facility and parking garage just north of the civic campus.

Jennifer Goeke, project manager for PGAV Architects, and Susan Schaefer, senior project manager for JE Dunn Construction, provided insight into the meticulous care and challenges involved in the design and construction process.

“Our goal was to create a unique sense of place for the City of Lenexa with pedestrian connectivity and really ‘activating the streets.' " Goeke said. “There was a lot of intent involved with the selection of materials and overall design to express the different components of the City Hall, Public Market and Recreation Center. One of the challenges was incorporating building services such as transformers, trash, utilities and loading docks because the buildings in this project don’t have a back side. They are all 360 degrees facing either public plazas or neighboring developments.”

Constructibility challenges included the 5-story, 500-space parking garage with a slight bend along 88th Street to maximize space within the project site. “This slight kink in the garage design added a month to the engineering process and at least a week to the erection process,” Schaefer said. "This was a 100 percent collaborative effort from beginning to end."

The collaborative spirit helped create friendships that made for a bittersweet conclusion to the massive three-year project, according to Michelle Kaiser, senior project manager for owner’s representative CBC Real Estate Group.

“The team spent a lot of time together over a two or three-year period, working all day and then bonding at Happy Hour ‘work sessions.' " Kaiser said. “It’s sad when you end such a great project after working with such a great team. There’s a bit of a let-down.”

Lenexa Civic Center is part of Lenexa City Center, a 200-acre, mixed-use development spanning all four corners of 87th Street Parkway and Renner Boulevard. For more information, click here.

Lenexa Director of Dommunity Development Beccy Yocham teed up discussion of the Lenexa Civic Center project at  CREW KC 's quarterly luncheon at  Grand Street Cafe .

Lenexa Director of Dommunity Development Beccy Yocham teed up discussion of the Lenexa Civic Center project at CREW KC's quarterly luncheon at Grand Street Cafe.