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Five Fast Facts: Kansas City Office Market

Five Fast Facts: KC Office Market

Check out our five fast facts of the KC office market!

Vacancy ticked slightly upward in the Kansas City office market in the second quarter, up to 14.5 percent from 14.4 percent a year before. But the market has remained active, and asking rates continue to climb as owners create the most appealing environments for companies and their employees. But outside of the basic statistics, what can the action from the first half of the year show us about the market? We analyzed the 23 largest office leases of the first six months of 2019 to see what trends emerged.

  1. Kansas City led the way.
    1. In terms of both total leases and square footage, no city saw more action in the first half of the year than Kansas City. The seven leases in KC totaled 585,793 sf, more than half the square footage in the analysis. Outside of KC, Overland Park remained a popular draw, with seven of the 23 largest leases totaling a little over 150,000 sf.
  2. South Johnson County saw the most deals.
    1. The largest concentration of office space in Kansas City is in South Johnson County, which also bears the area’s lowest vacancy rate at 10.5 percent, so it’s no surprise that the submarket saw more deals (11) than any other. With 268,741 sf between those leases, the deals were on average smaller than in metropolitan Kansas City, particularly in South KC, where three deals combined to top 400,000 sf.
  3. Class B drove the action.
    1. 17 of the 23 largest deals were in Class B buildings, totaling 690,401 sf (about 73 percent of all deals). Twelve of those deals were in the state of Kansas. That number sounds dramatic but it’s in line with overall market inventory, where Class B outnumbers Class A about three to one.
  4. It was a big six months for the creative class.
    1. More than a third of the leased square footage (369,897 sf) was to companies labeled as creative, including engineers and architects. Business Services, a wide-ranging category that includes administration and consulting companies, was next at 200,826 sf.
  5. Occupiers kicked the tires on new locations
    1. More than half (14 out of 23) of the biggest leases in the market were for new locations, meaning the company either expanded or relocated from its previous home. Those deals were on average much larger, too, at about 47,000 sf per lease, versus just over 30,000 sf per lease for renewals.
© 2019 Cushman & Wakefield, Inc.