2013 KC Industrial Outlook

THE RETAIL EFFECT

  

Landlocked from oceans and far away from mountain scenery, Kansas City may not be everyone’s ideal place to settle. But for those involved in shipping, transportation, or logistics, Kansas City is becoming king... especially for retailers.

The presence of significant FedEx and UPS hubs, as well as the largest foreign trade zone in the nation, support e-commerce.Companies like Amazon are spurring larger build-to-suit requirements to accommodate demand.With 92% of retailers selling online and 64% utilizing catalogs, retailers are embracing multichannel approaches to meet buyer expectations and battle for market share. With this multichannel selling, comes a major focus on retail distribution.


The goal of all retailers today is ship-to-shore to the store or your door as quickly and as cost-efficiently as possible. Kansas City is the ideal location for e-commerce distribution due to:

• Low transportation costs
• A favorable tax environment
• An unparalleled transportation infrastructure that supports the distribution of online retail businesses.

These positive attributes have attracted many big deals to the KC Metropolitan area in 2012:

• I-35 Logistics Park
• Quidsi Logistics
• Horizons Project--Premium Waters
• D.H.Pace
• Coleman building
• Perimeter Park
• Botts Road
• Northtown Business Center
• 4600 Kansas

(Construction is underway on Building B, an 821,256 sq. foot warehouse in the I-35 Logistics Park. The warehouse is the largest speculative building ever built in the Kansas City area.) 

In addition to big deals, a steady decrease in vacancy in Kansas City's Commercial Real Estate market. The key takeaways from this decrease in vacancy are: 

• Trends are going to continue in 2013 even with the uncertainty
• Need for companies to expand and grow; therefore we are going to see some announcements about the speculative development in 2013
• There is a demand of more blocks of 100K SF and over but there isn't the space available
• Cost to occupy the new and larger spaces will be a shocker
• We might see offerings of cubic space vs. square space available

For more Industrial insights go to: BRES 2013 KC Market Report!

Contributing Author:

Michael R. Block
Principal
Block Real Estate Services
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