Now that the holiday decorations are down, we jump to my favorite part of the new year: Looking ahead at what’s to come! What excites me about commercial real estate is having a front row seat to watch changes that are taking place in the industry, and then ensuring our clients are ready to take advantage of them. Our Cushman & Wakefield national research team has pulled together a list of 10 trends to watch in 2019, and I believe the following will have an interesting impact on Kansas City:
-Microtransportation Effect: The area between the river and the Plaza certainly saw an influx of scooter-sharing companies during the second half of last year, and while I’m guessing there’s less demand in this weather, scooters and shared bicycles will most likely be an even more common sight in the summer. As the CBD continues its revival, there certainly will be a place for non-traditional transportation like this.
-Lack of Industrial Space: Our local research team has noted that the pace of speculative construction has slowed as compared to the last couple of years, but it’s still much higher than the historical average. Our industrial team is confident there is still plenty of demand for new space in areas closer to Downtown, such as Riverside and Northland Park. Also, we’ve seen some large (750,000 square feet and larger) build-to-suit projects delivered in the last couple of years, and we predict there will be more to come.
-Warehouse Site Selection Shifts to Attract and Retain Workers: There are couple of trends on this list that deal with employment, wages, new workers entering the labor force, and retaining employees. In my opinion, EVERY commercial real estate decision involves these topics. Incentives, lease rates, infrastructure, and taxes also are part of the decision-making process, but there’s no point in having an office or a warehouse if you are unable to recruit people to come work there. Companies making decisions about where to locate any facility right now are heavily focused on making sure they’ll be able to attract the employees they need.
-Co-everything: Co-working has been a big buzzword in commercial real estate for a couple of years. But the move toward shared spaces has been underway for quite some time. You’re going to see more pop-up stores and retail space being used for events that will draw people in (Bricks-and-mortar stores that share space with brands that can create traffic.). Kansas City now has its first food hall, and more are on the way (A food hall is really several restaurants sharing a fun bar and a cool dining room.). The movement towards high-end amenities in apartments continues to accelerate (Residents agree to accept smaller units in exchange for high-end shared spaces that help create a community feel.).
Other trends will emerge throughout the year, and we can expect at least one major surprise every few months. But we know that at least these four topics will be at the center of local commercial real estate in 2019 — the driving forces behind changes that will inevitably come.
Michael T. Mayer is the Managing Principal of the Kansas City Cushman & Wakefield office. He brings over 30 years of experience in providing in-depth market knowledge, trends and expertise in all aspects of commercial real estate both regionally and locally.