Overland Park

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.  

 

Sprint HQ buyer Occidental eyes acreage adjacent to OP campus

Wichita-based Occidental Management expects to close on the Sprint Campus in the next 30 days. CEO Gary Oborny and President Chad Stafford talked with MetroWire Media about what led to the acquisition and plans for the sprawling Overland Park campus and adjacent land.

MWM: When did you first become interested in buying the Sprint campus?

Oborny: We heard that Sprint was looking at divesting at some point, so we started following opportunities to get closer to the situation and look at how we might connect on a potential deal. We sat back while Sprint figured out what to do. Then we contacted Cushman & Wakefield when the property was placed with them for a national search last year.  

MWM: How did your 2014 purchase of the former Overland Park International Trade Center (OPx) adjacent to the Sprint campus play into the acquisition?

Oborny: OPx was our introduction into the market. It helped us build relationships in Kansas City and Overland Park, so the Sprint campus was a natural fit. 

MWM: What is your short-term game plan for the campus?

Oborny: We want to enhance existing amenities and bring additional amenities for tenants who want to be on the campus. There are a number of cafeterias and food venues, so we will look at bringing in guest chefs and maybe freshening those spaces. We’re also looking at conceptual ideas to improve the overall aesthetics of the campus, so we will be look at revitalizing existing buildings to make them a little more contemporary... Eventually we’ll undergo a full rebrand of the campus. 

MWM: What will Sprint’s ongoing presence be?

Stafford: Sprint will continue to be the largest tenant, and the company is making a commitment to Kansas City with a long-term lease situation, but that’s all we can say right now. Sprint and Occidental are both focused on recruitment and retention of associates and employees on the campus. 

MWM: What is the current tenant mix and how do you see that changing?

Stafford: There’s a good mix right now between health care and financial services companies. There is also good infrastructure for technology-related companies, so there is opportunity there. 

MWM: What additional opportunities do you see? 

Oborny: We are looking at the 60 acres near 119th and Nall that have never been opened to commercial development. We see an opportunity to bring amenities to that vacant land such as hotel, restaurants and retail, but for right now we have to close. 

MWM: This is a huge transaction. What’s next for Occidental?

Oborny: Yes, it’s a big opportunity. We see a natural progression for us in Midwest cities, so development opportunities in the $100-$300 million range are certainly always of interest.

Launch Development prepares for liftoff of new mixed-use at former Loehmann's site

Construction is wrapping up on the first phase of The Promontory, a $98 million, 291-unit residential-over-retail redevelopment at 91st and Metcalf in Overland ParkLaunch Development Inc., in partnership with Jim Harpool and Evergreen Real Estate Services, plans a grand opening this spring.

“One of the big differences between this and any other project we have is that all the residential parking is separate from the retail parking,” Harpool said. “The units are wrapped around three sides of the parking garage, and you can park on the level that you live. So you just walk in and you’re home.”

All the Promontory’s one- and two-bedroom units include high-end finishes, 12-foot ceilings, balconies, and walk-in showers. Common spaces include a clubhouse with demonstration kitchen/bar, multiple flat-screen TVs, ample gathering space, and workstations.

Outdoor living spaces include a swimming pool/deck area and courtyard/green gathering area connected by a breezeway, or “cave,” that can be closed off depending on the weather. The breezeway features a big-screen TV, bar and fireplace. The indoor mezzanine area is home to a yoga studio and fitness center with treadmills overlooking the pool deck.

Harpool, a longtime proponent of Metcalf Avenue redevelopment efforts to the north and south of 95th Street, said the Loehmann’s project was not without challenges. Overland Park stormwater retention requirements added $1.3 million to site prep costs.

“We had to create a 12- to 14-foot high detention basin beneath the parking lot. You can park 17 semis under there,” he added.

The Promontory is part of multifamily redevelopment boomlet taking place between 95th and 80th streets along Metcalf Avenue. The residential projects aim to piggyback off about 1 million square feet of new or redeveloped office space taking shape in the corridor.

“You’re going to have between 800 and 900 units close to Downtown Overland Park opening in 2019,” Harpool said. “Between Tim Barton’s office building, Avenue 82 anchored by BRR Architecture, and Shamrock Industries across the street planning to hire 1,000 people, we have a little hub here.”

KC Wine & Liquors opened a new store at The Promontory in December, and additional leased space is available for retail stores and restaurants. At full buildout, The Promontory will include a total of 490 retail units and more than 150,00 square feet of retail space.

For retail leasing at The Promontory, email Ryan Robertshaw at Ryan@KCEvergreen.com

View a promotional video of The Promontory.

Check out a gallery of The Promontory clubhouse and residences below.

Lee's Summit study finds city is ripe for fresh multi-family development

The City of Lee’s Summit could support up to 2,300 additional market rate apartments over the next decade beyond existing supply or projects in the pipeline, according to a 2017 multi-family housing study commissioned by the Lee’s Summit City Council and conducted by Vogt Strategic Insights.

“Lee’s Summit continues to see strong activity and interest in multi-family construction, and this study will help inform the city’s economic development decisions as it considers future projects,” Ryan Elam, director of the Lee’s Summit Development Center, said in a release.

Multi-family construction in Lee’s Summit dried up after the 2008 housing crisis but saw signs of life in 2016 when NorthPoint Development opened The Residences at New Longview, a 309-unit, luxury apartment community that saw the developer’s fastest lease-up to date. 

“New Longview’s success essentially became a proof-of-concept for Lee’s Summit multi-family development, leading to a sharp uptick in permits and proposed projects,” said Lee’s Summit Economic Development Council President Rick McDowell. “In 2016, the city approved five new apartment complexes, for a total of more than 1,400 living units.”

The study found that Lee’s Summit’s existing market is very strong with a 98.4 percent occupancy rate, with about 30 percent of renters coming from outside the area. In addition to identifying strong capacity for market-rate apartment development, the study found that Lee’s Summit could support up to 503 additional units of age-restricted housing, as well as up to 400 additional units of affordable apartments.

To conduct the study, Vogt Strategic Insights completed a field survey of 27 apartment projects in Lee’s Summit and 101 projects throughout the region, comparing rents and amenities among more than 22,000 rental units in Independence, Blue Springs, Grandview, Overland Park, Olathe, Lenexa, and Lee’s Summit.

The 200-page housing study considered factors such as demographics, population growth forecasts, household income and the regional suburban Kansas City apartment market, and used a conservative 4.4 percent predicted growth in households over the next 10 years.

Former Loehmann's Plaza site is Metcalf Avenue's next development domino

Rubberneckers may be trying to catch a glimpse of Metcalf South Mall’s demolition, but that’s not the only teardown taking place this spring along Metcalf Avenue in Overland Park. The old Loehmann’s Plaza shopping center is coming down to make way for The Promontory, a $98 million mixed-use redevelopment that at full buildout will include 430 residential units with an attached 550-space parking structure, and 130,000 square feet of retail space.

Launch Development Inc. is leading the project in partnership with Jim Harpool, Evergreen Real Estate Services, and Matt Dennis, R.H. Johnson Co. Located on the northeast corner of 91st Street and Metcalf Avenue, the first of 290 residential units and over 21,00 square feet of retail space at The Promontory is slated to open in November.

The Promontory is the next redevelopment domino to fall in the Metcalf Avenue corridor and aims to take advantage of its central location south of Downtown Overland Park where at least four mixed-use multifamily projects are in various phases of construction—and north of the former Metcalf South Mall, which is being torn down to make way for an $80 million retail project anchored by Lowe’s.

“The thing that is unique about The Promontory is that the residential and retail parking are totally separate and you can park in secured structured parking on the level that you live,” Harpool said. “I think this is a different model from anything we’ve seen in Kansas City.”

Existing parking in front of the retail portion of The Promontory will be re-paved, re-lit and landscaped, with a separate multilevel parking structure planned for residents. Harpool said reasons for separating retail and residential parking were twofold: “First, so retailers aren’t fighting with residents about parking, and secondly, so you can conveniently park on the level where you live and you don’t end up having to drag groceries in and up from the ground level.”

Developers hope to capitalize on its location near two ambitious cultural projects slated to open this spring: The Johnson County Arts & Heritage Center and the InterUrban ArtHouse.

Located at the site of the former King Louie bowling and skate center at 8788 Metcalf Ave., the Arts and Heritage Center will open May 8 and will be home to Theatre in the Park productions, the Johnson County Museum and other arts events. The InterUrban ArtHouse, 8001 Conser St., is a 10,000-square foot co-working space with a dozen shared studios designed exclusively for artists located in the former post office and plans a June 15 opening.

The Promontory's amenities include an on-site park with walking trail; rooftop terrace; and outdoor common spaces including fire pits, movie screen, pool, bar, and game area. Retail activity is underway, according to Harpool, with a 50,000-square foot anchor tenant opportunity available along 91st Street and Bo Lings set to re-open in its new space by the end of June.