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Report: KC Industrial Market Sees Pipeline Growth in Q4 2024

A study by CommercialCafe shows the Kansas City industrial market has grown thanks to new construction starts and several other improved metrics. Photo credit: Will Crow.

Posted February 18, 2025

An industrial market report from CommercialCafe shows that KCMO ranked fourth in the Q4 industrial market rankings. This is due to decreasing vacancy rates and a growing pipeline.

In the fourth quarter of 2024, Kansas City is one of only five of the 30 major markets with decreasing vacancy rates in addition to vacant industrial space reaching 4.9% of stock, thats the third-lowest among all locations in the study by CommercialCafe.

The KC market has also experienced outpaced deliveries as new construction starts, resulting in an increased pipeline quarter-over-quarter from 10.7 million square feet in Q3 to 11.5 million in Q4.

Rents in KC climbed 5% year over year from $4.8 per square foot in December 2023 to $5.1 per square foot at the close of 2024. Average asking rents in all 30 major markets increased yearly.

Ahead of Kansas City in the rankings, Phoenix, Arizona was the best-scoring industrial market which placed first. The runner-up spot in second went to Orange County, California followed by Inland Empire, California in third. Falling behind KC in fifth was Atlanta, Georgia which matched its quarter 3 performance, according to the report.

“Industrial space — scarcely available during 2021 and 2022 — is now much more accessible for occupiers,” Director at CommercialEdge, Peter Kolaczynski, said in the report. “The national industrial vacancy rate in December was 8%, a significant surge from two years prior when the rate hovered below 4%. The contrast is even more stark in port markets like the Inland Empire, which had a sub-2% vacancy rate in 2022 but a 7.8% vacancy rate in December 2024. According to industrial property outlooks, industrial vacancy rates are expected to plateau in early 2025 before beginning to slowly tick down sometime in the second half of the year as supply is absorbed and new deliveries dry up.”

In the fourth quarter, 34.5 million square feet of industrial space went online across the 30 major markets, and another 188.2 million is currently under construction.