An understated office market
contrasts dramatically with lively
retail and residential
Greater Kansas City.
Real Estate Values
The residential market here has experienced the
significant slowdowns seen through-out the nation
following the sub-prime shakeup. However, the
region was expected to recover due to underlying
population growth and an overall price advantage
compared to other parts of the nation. Even during
2006 and 2007, areas within Greater Kansas City
continued to see strong demand due to local factors.
In traditional residential and commercial real estate terms, Greater Kansas City reflects the contrast typical of many Midwestern regions with large rural segments surrounding more intense urban development.
In terms of square miles, large portions of Greater Kansas City remain primarily focused on agricultural production. This includes some of the best farmland in the world along the Missouri River valley, as well as rich areas of plains and prairie in Kansas and south of Kansas City. Grazing remains active where crops are not predominant. Prices vary dramatically, from rich bottom land bringing $2,000 an acre or far less for upland properties.
A recent trend involves residential development in these areas. With many of these rural areas lying near small cities or the large, metropolitan Kansas City area, demand has increased for small residential acreages of three to 10 acres. This development includes small, large-lot subdivisions and individual properties, including frequent examples of “luxury ranches” and other upscale, rural retreats. This trend is especially significant in some areas such as southern Jackson, Cass and Buchanan counties in Missouri, and Douglas County, Kansas. The term“gentleman farmer” is not entirely accurate, but describes fairly well the combination of secondhome and long-distance commuter homes that make up this frequently upscale movement.
More traditional real estate values here show
equally diverse tendencies. An examination of residential
building permits during the most recent
complete year, 2006, showed the leaders to be Jackson County, Missouri, with 5,743, and Johnson County,
Kansas, with 3,751. Cass County, Missouri, was the third most active with 954. Three counties from each state saw between 300 and 600 permits during this period: Clay, Platte and Johnson in Missouri and Douglas, Leavenworth and Wyandotte in Kansas.
At present, the most active overall market in
Greater Kansas City involves retail development.
Along with light industrial in transportation and
distribution markets, retail construction represents some of the largest development in terms of both acreage and investment. Major projects are under way in almost every part of the region. The largest involve lifestyle or entertain-mentfocused centers. The most numerous are more
traditional, large box centers.
Recent examples of successful lifestyle centers
include Zona Rosa in Platte County and the
Legends in Wyandotte County. The multi-use Zona
Rosa successfully targeted a regional audience through design and tenant selection. The Legends, adjacent to Kansas Speedway, has become a Midwestern destination through its entertainment/retail mix that continues to grow. Large lifestyle projects that are under construction include the $350-plusmillion Park Place Community in Leawood, the $400 million mixed-use Prairiefire at Lionsgate in southern Overland Park, and the $225-million Corbin Park in Overland Park.
Zona Rosa is not the only retail hotspot near the I-29 and Highway 152 in Platte County. Newer development includes the Tiffany Springs Market Center and the Shoppes at Riverstone. In Clay County, the Highway 152 corridor near Liberty includes two shopping centers estimated at $80 million. Briarcliff Development has added to its luxury homes and office spaces with a $30 million retail area.
St. Joseph has seen several major
retail developments in recent years,
especially on I-29, including the Shoppes at North Village and nearby Tuscany Towers.
Some of the region’s most dramatic real estate growth is in eastern Jackson County. In Blue Springs, major growth is occurring along the Adams Dairy Parkway, while Lee’s Summit boasts several projects, including Summit Fair with 550,000 square feet of retail.
The most activity is in Independence.
Bass Pro Shop opened in February
2008, southwest of I-70 and M- 291. The $174 million retail project will
include a hotel, an 18-acre lake and extensive landscaping and new retail
area, the Falls, a separate 465,000 square-foot retail center. A nearby arena for minor league sports will add a significant entertainment component.
All of this pales compared to Downtown
KC. With $4.5-billion in urban
core development since 2003, the sheer size and scope of the effort is nationally noteworthy. The addition of 20,000 new residents in the area has changed the market dynamic considerably.
While not as large,
is also occurring throughout
Greater Kansas City. St. Joseph is the largest, but nearly every urban core
in the region is seeing redevelopment, often built around a combination of
tourism, entertainment, retail and some residential.
Bass Pro Shop | One of Missouri’s leading retailers, Bass Pro Shops has two Outdoor World Centers in the KC area including it’s newest installation in Independence, Missouri.
In other parts of Kansas
City, the overriding factor in real estate
involves commercial and industrial development.
Growth in markets such as
distribution and warehousing, intermodal centers and other logistics development has been strong.
This trend also included such unique markets as the animal sciences. In St. Joseph, a 125,000 square food processing plant for Triumph Foods was part of the employment resurgence, as well as redevelopment of its former stockyard.
For sheer size—and likely impact on
surrounding real estate—it’s hard to
surpass the development of huge intermodal sites near Gardner, Kansas,
and Belton, Missouri. The Burlington Northern Santa Fe Logistics Park near Gardner is expected to generate 3,000 new jobs.