Kansas City Retail Market Report
Development Slows Amid Robust Employment, Retail Environment; Coastal Capital Flows Into Kansas City
Cycle-low construction at odds with tightening retail vacancy. As unemployment reached the low-3 percent range by the end of 2018, the retail environment in Kansas City remains well positioned for future advancement. Consistent job gains and steady construction have sponsored a dramatically tighter vacancy rate; it reached a cycle low as net absorption averaged 1.5 million square feet over the past eight years. Despite the strong performance, development over the coming year will reach the lowest point in over a decade, with the pipeline skewed heavily toward net-leased projects in suburban locations. The largest slated completion will be the retail portion of the Village South mixed-use project just south of the Legends Outlets and Kansas Speedway in Edwardsville. The 27-acre development will include two hotels, a 22,000-square-foot conference center and more than 60,000 square feet of retail space. The diminished pipeline will allow for a further contraction in the metro vacancy rate, with average asking rents posting a second year of a low-single-digit gain.