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.  

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.