Newmark Zimmer’s Kansas City market reports provide a comprehensive overview of current real estate conditions by sector and submarket.

Kansas City Industrial Market – 4Q22

The Kansas City industrial sector ended the fourth quarter of 2022 with record-level leasing activity. Although the market displayed the first signs of a reduction in the pace of total net absorption during the second quarter of 2022, the market readjusted upwards to 3.3 million square feet of net absorption in the third quarter of 2022 and an additional 7.3 million square feet in the fourth quarter of 2022. Net absorption during 2022 totaled a record high of 16.7 million square feet, with projections indicating 15.3 million square feet of total net absorption could occur during the next six quarters. Increases in land pricing, construction pricing and general demand have pressed effective rental rates upward in the Metro. Asking rental rates for modern industrial buildings have increased by 10.6% in 2022 and are forecasted to rise at a similar pace in 2023. Rental rates increased $0.19/SF during the past quarter, up $0.54/SF during the past year.

  • Average Asking Rent: $5.64/SF
  • Vacancy Rate: 3.60%
  • Net Absorption: 7,349,818 SF
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Kansas City Office Market – 4Q22

Market vacancy in Kansas City increased to 15.1%, up 70 basis points from the prior quarter and 170 basis points higher compared with the prior year. Oracle Cerner announced during the quarter its intention to exit its World Headquarters Campus in North Kansas City, along with its Realization Campus in South Kansas City. The announcement will have a significant impact on local vacancy rates in 2023, especially once the space converts from being categorized as owner-user to third-party product. A combined total of approximately 3 million gross square feet, with most space being classified as office product, is projected to hit the market unless interested users backfill a portion or creatively repurpose the space for a different use. The market realized an increase in asking rental rates in the fourth quarter of 2022, as rents climbed to a record high of $21.52/SF, up $0.22/SF from the third quarter of 2022. Net absorption totaled negative 536,561 square feet during the fourth quarter of 2022, equating to negative 965,693 square feet during the past four quarters.

  • Average Asking Rent: $21.52/SF
  • Vacancy Rate: 15.1%
  • Net Absorption: -536,561 SF
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3Q22 Kansas City Retail Report

Kansas City Retail Market – 3Q22

The overall Kansas City retail market tightened year over year in the third quarter of 2022, realizing a 110-basis-point decrease in vacancy, to 4.5%. Net absorption totaled 1.6 million square feet for the past four quarters and 2.2 million square feet for the past two years. The average quoted rental rate is $14.28/SF, up by $0.26/SF from one year ago.

  • Average Asking Rent: $14.28/SF 
  • Vacancy Rate: 4.5% 
  • Net Absorption: 284,576 SF 
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Kansas City Capital Markets – 3Q22

The pace of investment activity in the Kansas City market improved significantly during the past four quarters, with sales volume totaling $5.0 billion, an increase of 37.7% compared to the prior year. As a leading second-tier market, the Kansas City Metropolitan area ranked sixth out of the largest thirteen Midwest markets in total sales volume during the past twelve months, with multifamily and industrial assets combining for 71.5% of the Metro’s activity. Capitalization rates decreased 68 basis points (bps) compared to the past twelve months, registering 5.4% in the third quarter of 2022. Top quantile capitalization rates decreased 108 bps compared to the past twelve months, registering 4.0% in the third quarter of 2022.

  • Class A Capitalization Rates: 5.9% 
  • 12-Month Total Sales Volume: $4.3 Billion 
  • 12-Month Total Transactions Volume: 280 Transactions 
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