Kansas City commercial real estate report reveals mostly-sound second quarter

Kansas City’s industrial market has been extremely active in 2020, according to a recent commercial real estate report by Newmark Grubb Zimmer.

The industrial market report showed 2.8 million square feet of net absorption posted in the first half of 2020, a 232% increase over the same time period a year ago, according to the report.

Average asking rent for the second quarter was $4.62 per square foot, vacancy rate was 5 percent and net absorption showed -92,652 square feet.

Despite some economic burdens caused by COVID-19, growth from ecommerce, logistics and food and beverage industries helped to boost activity in industrial.

Kansas City’s office market loosened in the second quarter, according to the report, vacancy increasing 200 basis points over the past year from 8.9 percent to 10.9 percent. Rental rates increased $0.24 per square foot to $20.79 per square foot.

Vacancy rate for the market showed 10.9 percent with a total net absorption was -758,392 square feet. According to the report, this brings the total for the past four quarters to negative 1.2 million square feet.

The retail market also loosened in the second quarter, the average asking rent $13.32 per square foot, the vacancy rate sitting at 5.3 percent and net absorption 36,103 square feet.

Kansas City capital markets were the only ones to experience a decrease in investment activity, the report showing a decline of 21.4% in total sales compared to last year.

In the second-tier market, the report showed that the Kansas City area ranked fifth out of the largest nine Midwest markets in total sales volume during the past 12 months.