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Market Report

Kansas City Office Investment Forecast

2020 Outlook

Employer Expansions Bolster Office Outlook; Suburban Employment Hubs Attract Mix of Buyers

Space availability shifts nominally for a third consecutive year. Vacancy in Kansas City reached a cycle-low rate during the latter portion of last year, placing the market on solid footing entering 2020. While overall job creation will moderate during the next 12 months, the number of office positions will rise, accounting for 30 percent of total employment growth. Cerner highlights the list of expanding organizations as the healthcare software company opens the third and fourth phases of its new $4.5 billion campus this year. These two completions, located off Interstate 435 in South Kansas City, account for more than half of the 1.4 million square feet of space slated for finalization during 2020. In Downtown Kansas City, the recent arrival of two USDA departments and a possible new headquarters for investment firm Waddell & Reed signal future employment gains in the core. Staff expansion by some of the metro’s largest tenants suggest smaller firms that support these companies will also grow staffs, requiring some firms to seek larger footprints in the market. Solid demand for available space coupled with strong pre-leasing allow the metro’s vacancy to compress for a 10th straight year, dropping the rate 380 basis points below the national year-end average.

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