KC leads the nation in lowest vacancy rate for 2019 industrial construction

Kansas City leads the nation with the lowest vacancy rate for 2019 industrial construction completions, according to a recent report from CBRE.

Developers completed construction of 289 million SF of industrial and logistics real estate in the U.S. last year, but any concerns of oversupply are tempered, as only 39 percent of space in new construction was available.

Deliveries outpaced the 255 million SF of new absorption, but with robust leasing from occupiers, especially e-commerce and retail firms that often require modern building design and amenities, supply and demand dynamics remain healthy.

“With national vacancy at 4.4 percent, it was becoming difficult for occupiers to find modern space,” said James Breeze, CBRE Global Head of Industrial & Logistics Research.

Another major factor contributing to the strong absorption of new construction is the increase in built-to-suit development—the construction of space for a specific space user. This segment made up 28.1 percent of new construction activity, as companies increasingly need unique requirements to meet their specific demands.

“This new supply is needed and will keep transaction activity strong, especially for larger deals. The robust activity in newly constructed product also warrants the large amount of groundbreakings we continue to see," Breeze said.

In markets with over 4 million SF of new development, Kansas City finished 2019 with the lowest overall vacancy rate for 2019 construction completions at 7.3 percent, followed by Miami, Baltimore, and Greenville, SC, which all had vacancy rates for newly constructed product under 20 percent. Dallas-Fort Worth was the strongest core market, with nearly 75 percent of the 25 million SF completed in 2019 taken.

“The statistics tell the story, there is still very strong demand in Kansas City from a wide variety of industrial users,” said Joe Orscheln, a senior vice president in CBRE’s Kansas City office. “The majority of the space delivered in 2019 was speculative, which speaks even further to market demand.”

According to the report, supply fundamentals should remain stable this year, as already 33 percent of the 309 million SF under construction nationwide is already accounted for. A pre-leasing rate of 25 percent for under-construction product typically are indicative of a solid leasing environment.

“With pre-leasing robust for under construction projects, the overall vacancy rate is expected to remain in check in the foreseeable future,” said Breeze.

Read full CBRE Report here.

New master plan unites St. Elizabeth School and church in Waldo

Construction is underway on a $6 million addition and renovation at St. Elizabeth's Catholic School and Parish in the Waldo neighborhood of Kansas City, Mo.

St. Elizabeth’s Early Childhood Center (ECC), located across the street from the church, is also included in the campus master plan as part of a design-build partnership with Straub Construction, Hollis + Miller Architects and Lankford | Fendler + Associates. 

The new plan unites the ECC and the church on the west side of Main street, with the goal of improving safety, security and functionality for students, faculty and staff.

"By relocating the ECC building to the main campus, students and teachers no longer have to cross the street at the busy intersection of 75th and Main. The new master plan provides a safer solution," said Joe Riedel, vice president of business development for Straub Construction.

Many of the students who now attend the school are the second —or even third — generation of families to attend St Elizabeth School.

"One of the coolest parts of this story is how so many current parents, who once attended the school themselves, have banded together to pay it forward to ensure the legacy of the school stays strong for the next 100 years," said Riedel.

The 20,000 SF project includes a conversion of the existing rectory, built in 1948, into modern learning spaces designed specifically for students pre-school through kindergarten. The main sanctuary will be renovated to improve accessibility, functionality, storage and acoustics.  

“The new Early Childhood Center at St. Elizabeth establishes an exciting vision for our parish and school moving forward. It strengthens our commitment to the education and religious formation of our children and locates all our school buildings in close proximity to one another. The new facility will be tailored to the needs of early childhood education and will enable us to serve more families in the Waldo area,” said St. Elizabeth Parish pastor, Fr. Greg Haskamp.

Renovations to the sanctuary are complete. The Early Childhood Center will be open for school in August 2020.

$26.5 billion Sprint and T-Mobile merger paves stability for Johnson County

Last week a federal judge ruled in favor of the $26.5 billion Sprint and T-Mobile merger, shutting down anti-trust arguments brought by a group of attorney generals and clearing the way for the merger to close as early as April this year.

Prior to this ruling, reports of concerns on the stability of Sprint as a standalone company if the merger was blocked, created uncertainty of Sprint and T-Mobiles’ future office presence in South Johnson County. 

"These fears are now alleviated, as the merger will pave the way for stability in the Kansas City office market and the companies’ commitment to remaining in Kansas City. All signs point to continued stability in Johnson County," according to a recent report by JLL Research*.

The former Sprint Campus, now renamed as The Campus, sold to Occidental Management in July 2019. That quarter, availability in South Johnson County increased 0.4% after several former Sprint spaces became available. 

Availability in South Johnson County currently stands at 13.7%, below the market average of 16.2%.

Sprint currently occupies an estimated 2.2M SF of The Campus, with long-term leases to remain in about 1M SF. Sprint has also committed to at least $25M of capital investment to improve their long-term space.

About 1.5M SF is currently leased by third party tenants; 120,000 SF of which was leased since Occidental acquired The Campus. About 130,000 SF is currently available and marketed for lease. Occidental Management plans to invest significant capital in the campus to add amenities and attract third-party tenants.

A Place For Mom recently leased 42,000 SF at The Campus to house their first Kansas City office and has plans to hire 600 new employees to the KC metro.

Sprint currently employs 6,000 people at the campus and has shared speculative plans to hire 1,000 more.

*Statistics, opinions and other facts in this article sourced by JLL Research.

Miller Stauch Construction shares love for KC, HQ projects

Miller Stauch Construction is currently working with Schier Products to build their new office headquarters at the corner of Woodland Drive and Shawnee Mission Parkway in Shawnee Mission, Ks.

The 52,000 SF building will include a combined office and warehouse space for the grease interceptor manufacturer's approximate 50 employees, who will be moving into their new state-of-the-art headquarters, designed by GBA, upon completion later this year.

But that's not the only office headquarters project Miller Stauch has working in KC.

First Heritage Bank and doorLink Manufacturing will also move into new office headquarters later this year, thanks to Miller Stauch, who is about to reach a milestone century of working in KC.

“Miller Stauch Construction has been building Kansas City for over 95 years. We love Kansas City and are proud to do our part to establish new homes for our clients,” said Grace Elmore, marketing manager for Miller Stauch.

First Heritage Bank, who currently has five locations in Kansas, is working with Miller Stauch and

Davidson Architecture & Engineering, to build their newest branch in the heart of Lenexa, Ks. The new HQ location includes 5,500 SF of space and will house the bank’s commercial banking division.

Residential and commercial door manufacturer, doorLink Manufacturing, will be moving into their new headquarters later this year as well. The new space includes 240,000 SF of office, manufacturing and distribution space in Riverside, Mo.

"Kansas City is rapidly growing and is making a name for itself on the national stage. Companies are planting their roots here, which is exciting to both participate in and experience,” said Greg Dean, director of business development for Miller Stauch.

Miller Stauch is an expert in the retail, office and industrial markets and has completed several similar projects in Kansas City over the years. This includes an 80,000 SF industrial office building for North American Safety Valve, completed in 2018.

"GBA has worked with Miller Stauch Construction for 35 years on many successful projects in the industrial/manufacturing sector. We truly enjoy the long-term partnership among their team and ours," Craig Rogge, principal for the GBA buildings group, said.

CoStar acquires RentPath for $588 million

CoStar Group, Inc., the leading provider of commercial real estate information, analytics and online marketplaces, announced today that it has signed an agreement to acquire RentPath’s business for $588 million in cash, in connection with RentPath’s recently announced Chapter 11 bankruptcy.

RentPath’s primary service is digital marketing for rental properties through a network of Internet listing websites including Rent.com, ApartmentGuide.com, Rentals.com and Lovely.com.

The RentPath network of websites generated over 21 million monthly visits and almost 9 million monthly unique visitors in 2019, according to comScore, and had approximately 28,000 properties advertised on its network as of December 2019.

“RentPath has a 30-year track record of outstanding service to the multifamily industry, developing thousands of meaningful customer relationships,” said Andrew C. Florance, founder and CEO of CoStar Group.

Following restructuring in bankruptcy, CoStar Group expects the combined companies to benefit from synergies and plans to invest in building RentPath’s online brands and traffic to provide improved quantity and quality of lead flow to advertising clients.

“We believe that RentPath’s talented and experienced employees will become valuable contributors not only to our Apartments.com network of sites but across all of our marketplaces.” Florance said.

The closing of the transaction is subject to various conditions, including approval by the bankruptcy court and regulatory approval, according to the release.