Newmark Zimmer’s Kansas City market reports provide a comprehensive overview of current real estate conditions by sector and submarket. Newmark Zimmer is constantly monitoring market indicators, tracking and analyzing supply and demand drivers, cyclical patterns and industry trends. The following quarterly research data examines the multifaceted Kansas City commercial real estate market.
The market recorded 218,829 SF of net absorption in fourth-quarter 2025, bringing the annual total to 8.4 million SF. While many markets across the U.S. experienced negative absorption in 2Q and 3Q, KC posted positive absorption, demonstrating its importance as a centralized intermodal hub. Robust leasing activity was ongoing throughout 2025 with tailwinds also projected for 2026. Consistent demand and a limited spec pipeline drove vacancy down 40 bps year over year to 5.0%. Kansas City ranked fourth in lowest aggregate vacancy rate in 4Q25 among the top 30 U.S. industrial markets. Of the 6.4 million SF construction pipeline, more than 4.8 million SF (75%) is currently dedicated to build-to-suit projects including Panasonic’s 2.35 million SF, Precision Vehicle Holdings’ 850,510 SF and Amazon’s 630,000-SF distribution center.
The market recorded 114,978 SF of net absorption during the quarter, bringing the 2025 total to 924,086 SF. This marks the sixth consecutive quarter of positive absorption, driven by tenants capitalizing on favorable leasing conditions. The non-owner-occupied construction pipeline has remained inactive since the fourth quarter of 2018, with just 116,660 SF currently under construction. Vacancy decreased 10 basis points to 15.9% in the quarter and 90 basis points year-over-year. The trend is expected to continue in 2026 towards 15.0% as the market stabilizes and Class A product continues to experience strong leasing momentum. Average asking rental rates declined to $23.10/SF in the quarter but are expected to grow 2.5% to 3.25% by year-end 2026.
Kansas City continues to outperform regional and national retail benchmarks as leasing activity exceeded new deliveries by six-to-one during 2025. The market ranked in the top 20 out of 75 markets in 3-year net absorption total; combined with limited new supply on the horizon for 2026, Kansas City is positioned as an expanding growth market. Retail investment volume for all-sized deals peaked at $888 million over the past 12 months, a 55.4% increase year-over-year, with sustained activity in core infill areas and community shopping centers. National brands and local operators will continue to procure in-demand prime space in the Metro as the sector is expected to outperform historical fundamentals in 2026.
The pace of investment activity in the Kansas City market increased during 2025, with sales volume totaling $3.7 billion. As a leading second-tier market, the Kansas City Metropolitan area ranked sixth out of the largest 13 Midwest markets in total sales volume during the past 12 months, with multifamily and industrial assets combining 65.7% of the Metro’s activity.
For a more detailed view of the industrial, office, retail and investment commercial real estate markets, please visit the research section of Newmark Zimmer’s website. Additionally, national reports and market insights are available online through Newmark.
