Kansas City is in the midst of an urban renaissance been driven by a dramatic increase in residential population, and it is clearly benefitting the commercial real estate office market. For two decades, Kansas City watched as Downtown tenants moved out. This trend was due in large part to companies’ response to employees’ desire to work in the suburbs, where raising a family seemed more attractive.
In the past few years, we have seen a complete reversal as employers work to attract Millennials (those born between 1981 and 1996). With more than 56 million Millennials working, they are now the largest cohort in the labor force, and they have flocked to the revitalized Downtown with its live-work-play environment and improved public transportation.
Of course, Millennials are growing up. There are now over 17 million “Millennial Moms” who have given birth to at least one child, and so, the question is: How many Millennials will begin to migrate away from urban areas? While that answer will take some time to fully shake out, one thing is clear and that is Downtown will no longer watch people leave because the urban core lacks amenities and opportunities.
The most obvious sign of this evolution is the steady progress made toward “vertical neighborhoods,” where the lower floors are occupied by amenities, the mid-level floors are office, residential, or sometimes both, and more and more frequently, common spaces are on the highest levels. Both 10 Main and Commerce Tower are making a concerted effort to incorporate everything in a suburban mixed-use development into one Downtown building. You can now find daycare centers and charter schools mixed in with coffee shops and restaurants.
Another change is that while dated amenities such as laundry and business centers still exist, the prominent space that once might have been a dry cleaner has been replaced by a high-end club room with high-speed wi-fi. Green space on rooftops, like the space at 909 Walnut and One Light, is becoming more and more common, and the idea of having a pet while living Downtown is no longer a fantasy. Landlords and developers have gone from establishing strict parameters to finding ways to accommodate, attract and retain residents.
Some Millennials will undoubtedly choose to migrate to the suburbs, but Downtown now has options that have not been offered since the development of interstate highways. It won’t look quite like the suburbs — instead of walking downstairs to take your dog out, you may ride up in an elevator.
Downtown will continue to feel more and more like a neighborhood. It’s worth remembering the connection between two projects that were key to downtown Kansas City’s revival. Cosentino’s Downtown Market, the first grocery store located Downtown, and the One Light apartment building, which changed the way Kansas City viewed Downtown living. That was not an accident.
Jeff Winters is a Director in the Cushman & Wakefield office division where he specializes in tenant and landlord representation in the Kansas City metropolitan area. He brings valuable insight and extensive experience in strategic planning, assessment of needs and occupancy relocation to his clients and the team.