New Opportunities for Commercial Real Estate in 2013

There are many new challenges and opportunities for commercial real estate in 2013 to keep in scope as they new year progresses. A key part of the BRES 2013 business strategy is to aggressively pursue opportunities that will elevate results for our clients. The face of the commercial industry is ever-changing and any CRE company must be actively pursuing the challenges opportunities in the industry in a way that will best benefit their clients. At BRES, some of the major opportunities we pursued have developed into divisions of their own.....


Block Multifamily Group

Multifamily properties remained at the top of investors’ wish lists throughout 2012. As the economy continues its sluggish recovery and uncertainty is the new normal, individuals have gravitated towards apartments as an affordable, flexible form of housing. Block Multifamily Group is positioned to meet this demand.

With the amenities being incorporated into newer Class A developments, the renter-by-choice pool has also grown steadily. This has provided a solid footing for key rental housing fundamentals, which have experienced occupancy and rental growth. This demand, coupled with historically low interest rates, has pushed investor pricing beyond their previous pre-recession peak.
BRES just paid about $35.5 million for a 396-unit luxury apartment complex in Austin, Texas and we plan to acquire about 1,000 units a year for the next five years and to buy 500 to 1,000 more units a year with third-parties in that same span. Read more in the Kansas City Business Journal. 

Overall, it was a robust year for Kansas City apartments. Strong fundamentals, low interest rates and improving demographics indicate that 2013 will be an encore performance.



Lexington Farms Apartment Homes, a Class A complex in Overland Park, Kansas, sold for $38.6 million, at a 5.86% cap rate to JMG Realty.

Block Construction

The year 2012 was a rebound year for construction and development as a whole for the Kansas
City marketplace. The rebound by sector differed slightly across the board, but overall construction activity was up significantly in 2012 compared to past years. Construction pricing and material pricing have started to rise as well, but haven’t quite approached the levels prior to the economic downturn.

Block Construction Services (BCS) played an integral role in several significant projects in 2012. Here are a few: 

• Teva Neuroscience
• 154,268 square foot build-to-suit office development in Overland Park, Kansas
• Read the Kansas City Business Journal Article 
• Ameriprise Financial
  Roe Corporate Centre 15,637 square foot tenant improvement project in Overland Park, Kansas
• Power Group
  Roe Corporate Centre 13,529 square foot tenant improvement project in Overland Park, Kansas
• Polsinelli Shughart
  Plaza Vista 234,876 square foot tenant improvement project in Kansas City, Missouri
• Read the Kansas City Business Journal Article

We are very excited about the potential of new ground-up industrial and office development activity in 2013, the continued increase in the volume of TI construction and capital improvement contracts, as well as the potential for development in the multifamily sector of the market.


Block Healthcare Development
With the United States Supreme Court upholding the mandate in June 2012,  there is no doubt that the PPACA is here to stay. Key stakeholders in the industry are now making directional changes in how they practice medicine and strategize for future growth. One area that cannot be overlooked in this significant shift in health care strategy is in the real estate sector.

Healthcare Challenges

• 32 million more people will be covered via a health plan beginning in 2014.  That increase in patient volume alone has physician practices and health systems trying to figure out how they will be able to accommodate such an influx of patients.
• In addition to more patients, physicians are seeing their Medicare reimbursement rates cut, which trickles over to the commercial insurance reimbursement which is often a percentage of Medicare. So now physicians are charged with seeing more patients and getting less reimbursement.

With the increase in patient volumes via the mandate, the opportunity for new development arises. Both physician and hospital-owned facilities are looking at expansion opportunities. Some of these opportunities lie solely in adding on to the current facility, while others who are landlocked need to look to areas for new developments that not only address their space needs, but also could provide a chance to relocate to a more centralized location to better serve their outpatient population.


The 20,000 sq. foot Grandview Medical Building, home to Hickman Mills Clinic, Carondelet Heart Institute and Albers Medical Pharmacy, brings a high level of integrated outpatient health services to the Grandview, Missouri community. This project was developed by Block Healthcare and syndicated with some of the existing doctors and BRES investors.

Within Block Healthcare Development, our approach is to continue to evolve with the changing health care landscape and provide our investor community an opportunity to share in what is truly a growth market in commercial real estate.

Contributing Author: 

Harry P. Drake, CCIM, CPM
Executive Vice President / COO
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Block Real Estate Services, LLC