Kansas City-area retail is picking up after years of economic turmoil and stalled projects throughout the metro area, according to the 2013 retail forecast from Block Real Estate Services (BRES).
Kansas City’s retail environment is well on the mend. We are still a long way from needing additional speculative retail developments, but with the increase in retailers committing to the metro and the increased number of leases being completed, this activity is sure to reduce the overall vacancy rate and help to improve rental rates in 2013.
Development has been specific to single-tenant users or small multi-tenant buildings with a few tenants lined-up in advance in redevelopment or infill locations. With the exception of Prairiefire in Overland Park, and the redevelopment of Truman Corners in Grandview, Missouri and Wyandotte Plaza in Kansas City, Kansas, this is anticipated to continue over the next couple of years. We can continue to expect to see more infill and redevelopment, mostly on a smaller scale as larger, new developments continue to seek economic incentives to help with development costs.
North Johnson County is the hot spot for the area’s most significant new developments. The most popular project is at Merriam Village, where an IKEA is slated for 2013 construction and set to open in 2014.
Kansas City has been longing for an IKEA store for many years and will finally get its wish. IKEA purchased Merriam Village and is aiming to open in the fall of 2014. The Swedish furniture retailer plans to demolish the center and replace it with a 349,000 sq. foot store. The center, located at Johnson Drive and I-35, was developed in 2008 housing Circuit City for a short time prior to their demise. Merriam Village never secured additional tenants and has sat vacant until now.
RETAIL OUTLOOKWith Kansas City now home to 75 of the top 100 hottest retailers, who will be next to announce they are ready to open in Kansas City? Maybe Corner Bakery Café, Container Store, Plow & Hearth, Five Below, and Academy Sports and Outdoors will make the commitment in the coming year. Time will tell. In the meantime, for 2013 we predict a forecast of overall slight increases in rental rates with decreasing vacancy rates.
For more insights to the KC Retail market click here for the BRES Market Report!
Vice President of Retail Leasing
Block Real Estate Services