The Office Market
In its position at the center of the Kansas City area, Jackson County dominates
the metro office market. According to Cohen-Esrey Real Estate Services, as
of December 2001, all the county’s submarkets totaled 22.6 million square
feet, well over half Kansas City’s total of 39.7 million square feet.
With the exception of the Plaza, most of Jackson County’s submarkets
show some softness, but overall vacancy for the JaCo markets of 14.49% is
not far off the metro average of 14.07%.
The future of the central business district remains uncertain as Aquila’s
defunct energy-trading unit will likely leave 190,000 square feet in the Town
Pavilion, and Shook, Hardy & Bacon plans to leave the downtown loop to
take over 500,000 square feet in its new Crown Center building.
Just as Crown Center gains one law firm, unfortunately, it loses another.
The Plaza Colonnade, planned for the Plaza Library site, may soon be under
way with the announcement that Blackwell Sanders Peper Martin will join RSM
McGladrey as a tenant.
The South Kansas City submarket will remain volatile as Sprint continues to
vacate office buildings there. Other companies, however, such as American
Century Investments and Burns & McDonnell, have absorbed large blocks
of space along the Ward Parkway corridor.
The Industrial Market
Commercial real estate firms in our town typically combine Executive Park,
which is in Jackson County, with the Northland, which is not, into one industrial
submarket, and that particular market has felt the effects of the economic
slowdown over the last year. According to Cohen-Esrey, vacancy in that market
increased from 7.2% in December 2000 to 11.64% in 2001.
The other major submarket in Jackson County is really a combination of two
markets—the Central Industrial District and Eastern Jackson County. Combined
total vacancy in these two markets at the end of 2001 was 3.65 percent, down
from 5.02 percent the year before. Some of this decrease may have been due
to owners finding alternative uses for obsolete multistory industrial buildings.
Overall this market appears to be faring well compared to vacancy in the total
Kansas City market of 7.98 percent.
The trend in industrial space is expected to continue through the end of 2002
with minimal new construction. The exception is for owner-occupied buildings.
Motor Sports Marketing is expanding its retail and distribution facilities
in Grandview, for example. Also in Grandview, Swiss-based SIKA Corp. has built
a new 210,000-square-foot regional manufacturing facility. And Kohl’s
has put up a 550,000-square-foot distribution center in Blue Springs.