The end of the ‘border war’ in the the Kansas City metro area that gives tax incentives to businesses to cross the state line could soon come to a close if Kansas government adopts a proposal to stop the practice. Missouri already has, contingent upon Kansas’ participation.
If the two sides can reach an agreement, it would likely benefit office-building owners around the area, said Miles McCune, a senior director in the Kansas City office of international brokerage firm Cushman & Wakefield. “We’re probably going to see more renewals and more tenants stay in place, and that’s good for landlords,” he said.
Meanwhile, Cushman has released its second-quarter office report for the metro area, and office owners are seeing rents increase regardless of an agreement. They currently average $21.37 per square foot, up from $20.20 during the same year-ago period. Vacancy rates are at 14.5 percent, only 10 basis points above where they were in the second quarter of 2018, despite new construction.
Cushman’s research team says that there is some movement toward speculative office construction downtown, as tenants remain interested in the area.