Kansas City Forecast Panel
Kansas City Forecast Panel
It’s a new year. A new decade to reflect on past successes that have contributed to Kansas City’s growth, and look ahead to new developments, and most exciting, new markets.
Chris Vaeth, Vice President of Operations, moderated the MetroWire Media 2020 Kansas City Forecast Panel hosted at McCownGordon. Panelists included Tim Cowden, president and CEO of KCADC; Nick Suarez, SIOR, CCIM, senior managing director and principal at Newmark Grubb Zimmer; Tim Homburg, co-president of NSPJ Architects; David Caffrey, chief lending officer at Country Club Bank; and Todd LaSala, partner at Stinson, LLP. These industry experts shared their insight on the current state and future of the Kansas City market as we move into the new year.
It’s Only Up from Here
Tim Cowden is confident about Kansas City’s momentum. “Kansas City is ascending,” Cowden said. The Kansas City market is “maturing into a nice, large-sized metro area,” Tim Homburg noted. Going into a new decade, Chris Vaeth is excited about the continued development of the metro area thanks to market and economical health. He believes 2020 will be a “pivotal year” in the booming local commercial and housing markets.
Multifamily and Office Markets
Homburg noted that people are migrating into the metro area causing a parallel rise in demand for office space because newcomers don’t want to commute as far. They will also be interested in having entertainment and dining nearby. Starter homes are closer to $350,000 now, so people are renting to save up for the down payment on such a home. To meet that growing need, Homburg says, “We’re pacing with what the demand is.” Office spaces, on the other hand, are up and coming. While there is currently a lack of bigger office spaces, Nick Suarez says, “our skyline is changing,” butshortly, we will “be able to compete with all of our peer cities.” While rental rates have continued to slowly increase, the amount of quality office space has as well.
Opportunities to Grow
Healthcare facilities are changing from larger hospitals to smaller outpatient buildings, according to Vaeth. This is one area he predicts will continue to grow in demand. Suarez noted investment is another area that is up and coming. He observed that, “Kansas City is a very desirable place for investors to park their money,” especially if they’re unable to invest in more expensive markets like Denver, Nashville or Minneapolis. Cowden is excited about the future of spec industrial buildings. “Kansas City is so well positioned for e-commerce,” he said, noting the city as a key location for this market in the coming years. Cold storage is also another area of high demand as food production operations only continue to increase. David Caffrey mentioned the city’s central location in the U.S. and noting, “every internet line is coming through Kansas City creating a need for network operating centers.”
Truce: Kansas vs Missouri
Todd LaSala weighed in on the unique challenge of Kansas City’s location crossing state lines and how the new Kansas-Missouri truce affects the market. The truce between the two states “levels the playing field,” as Kansas and Missouri came to an agreement that they “will not treat jobs for border counties” that switch states as “new net jobs.” Cowden added it’s important for “Kansas and Missouri to be at the top of their game for Kansas City to reach its maximum potential.”
Cowden thinks the “opportunities in Kansas City are limitless,” especially if change is embraced and challenges are faced head-on. LaSala cautions that at the same time, “you have to be strategic and thoughtful, and not panic.” Homburg noted that creating effective mass transportation will be an important factor in getting people through the difficult downtown rush hour. Kansas City has started heading this direction with the streetcar, but a more streamlined, bigger approach will be necessary to speed up commutes. This will allow Kansas City to reach the same level as its peer cities and continue to improve. A unique factor is also the upcoming Superbowl LIV, and how a win or lose might affect bringing new growth into the city.
Regardless of what markets Kansas City continues to excel in or begins to expand, the panel agreed: 2020 will be a year of moving up for the city.