For the 15th consecutive year, Block Real Estates Services’ knowledgeable real estate investment, sales, marketing, operations and construction professionals have shared their insights about the state of the business climate for the metropolitan area and their forecast for 2015.
“In 2014, the Kansas City economy began to gain steam,” the report says. “Industry leaders included the automobile industry, IT, and the health sectors as they have in the past, but the addition of e-commerce and the intermodal have also become major influences.”
The report says the region’s gross regional product grew in 2014 at an annual rate of approximately 2.9 percent, an increase of 1 percent over the 2013 rate of 1.9 percent. The 2014 growth rate also was higher than the U.S. GDP of 2.2 percent. Although the report predicts that the 2015 GRP will be slightly lower, it still will be a healthy 2.73 percent.
“Kansas City’s recovery continues to accelerate as employment growth, particularly led by Cerner and the healthcare sector, exceeds expectations,” the report says. “More contributors to job growth include finance, insurance, healthcare and service job growth, together with an improvement in manufacturing.”
BRES also predicts an increase in total employment of 1.5 percent in 2015 and nearly 1.4 in 2016. “The Kansas City Metropolitan economy has added an average of 10,100 jobs year-over-year since job growth turned positive in July 2010, but this is still 2,200 fewer jobs per year on average than during the mid 2000s.”
During 2014, the industrial market continued to accelerate, according to the report, with more than 3.2 million square feet of new Class A space under construction, compared to 2 million in 2013.
“Leading this surge is activity at the intermodal centers, the automobile industry and related businesses, and e-commerce,” the report says. “Expect Kansas City to be a highly sought-after industrial location for these three sectors over the coming years, as the intermodal alone will spur industrial development of nearly 120 million square feet over the next 20 years.”
Residential construction continues to be a bright spot in the Kansas City economy, especially the acceleration in multifamily activity in the downtown core: “While there has been an emphasis on the growth of residential in the downtown core for many years, with 14 projects and over 2,200 units now underway or planned, we are seeing the biggest surge in downtown housing in years.”
The impetus driving the Kansas City economy, according to the report, is its location. “Perhaps Kansas City’s strongest attribute is its location in the middle of the country and in the central time zone, which allows it to attract a constant influx of visitors from a multitude of small communities in the surrounding seven states.”
This central location also attracts numerous companies and many have their headquarters in Kansas City. It is a prime location for distribution centers: “Kansas City continues to rank as one of the strongest distribution centers in the country. It has the number one ranking by rail freight volume and the number two ranking of largest rail centers in the U.S. behind Chicago.”
Other factors attracting businesses to Kansas City include the quality of life: “Kansas City is well known nationally and internationally for its art and culture and has a multitude of venues to enjoy arts and cultural events,” the report says. It also cites the number of professional sports teams and the variety of entertainment venues available that draw people from several surrounding states.
All of these factors have led to several national rankings for Kansas City, including being “ranked the number one ‘Best In Class’ regional economic development acquisition in the U.S., according to the 2014 Winning Strategies report,” the BRES report says. “Kansas City was also ranked third overall on the list of America’s favorite cities by Travel & Leisure. Huffington Post ranked Kansas City the number one city to keep on your radar due to is affordability, cultural venues and desirable lifestyle.”
Click here to get the entire Real Estate Report for Metropolitan Kansas City 2015.
Contributor:
Kenneth G. Block, CCIM, SIOR
Managing Principal
Block Real Estate Services
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