Kansas City Industrial Market – 2Q26
The market recorded 242,003 SF of net absorption in 2Q26, bringing the past four-quarter total to 3.1 MSF. While many markets experienced a tepid 2025, Kansas City posted positive absorption, demonstrating its importance as a centralized intermodal hub. Kansas City is benefiting from a broad base of industry types occupying space across the metro. Of the 7.5 MSF construction pipeline, 4.28 MSF (57%) is currently allocated to BTS projects; however, this proportion has already declined significantly in 2Q26, as nine speculative projects are now under construction including: Scannell Properties’ 648,150-SF I-35 Logistics Park V, VanTrust’s 577,500-SF Building IV at Raymore Commerce Center and Hunt Midwest’s 505,440-SF HMBC Logistics VII. Asking rents increased 6.4% year over year and are expected to continue to increase 3.50% to 4.25% over the next four quarters. Kansas City, the 31st-largest MSA by population, ranks 15th in industrial market size, fourth in lowest aggregate vacancy rate, ninth lowest in deliveries SF and 12th largest in under construction SF in 2Q26; and 12th in largest bps vacancy decrease year over year among the top 30 U.S. industrial markets.
- Average Asking Rent: $6.28/SF
- Vacancy Rate: 4.7%
- Net Absorption: 242,003 SF
Kansas City Office Market – 2Q26
The market tightened with 314,025 SF of net absorption in the quarter, equating to an impressive 1.4 MSF during the past four quarters. Leasing activity is expected to increase for the remainder of 2026, especially in the Class A segment, as tenants pursue favorable long-term strategies in prime spaces. Vacancy rates for Class A properties are above 17.0% in the Downtown/Crown Center, South Johnson Co. and Wyandotte Co. submarkets, offering various opportunities. Office to multifamily conversions in Downtown continue to lessen overall vacancy. Expansive amenity renovations and constant demand for prime Class A space is expected to sustain momentum in 2026. Average asking rents increased $0.15/SF to $23.02/SF in 2Q26, registering a 0.6% YoY increase. Rental growth should approach the 2.50% to 3.25% range by year-end 2026.
- Average Asking Rent: $23.02/SF
- Vacancy Rate: 14.2%
- Net Absorption: 314,025 SF
Kansas City Retail Market – 1Q26
Kansas City continues to outperform regional and national retail benchmarks as leasing activity exceeded new deliveries by six-to-one in the past four quarters. Robust tenant demand combined with occupancy levels of 95.4% and limited new supply on the horizon for the remainder of 2026 reflect an expanding growth market. Retail investment volume for all-sized deals peaked at $725 million over the past 12 months, a 55.5% increase year-overyear, 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.
- Average Asking Rent: $15.02/SF
- Vacancy Rate: 4.6%
- Net Absorption: -607,186 SF
Kansas City Capital Markets – 2Q26
Investment activity in the Kansas City market accelerated over the past four quarters, with total sales volume reaching $4.8 billion, an increase of 32.6% compared to the prior five-year average. Among the 13 largest Midwest markets, the Kansas City metropolitan area ranked fourth in total transaction volume over the past year, with multifamily and industrial assets accounting for a combined 68.0% of activity.
- 12-Month Capitalization Rates: 68.0%
- 12-Month Total Sales Volume: $4.8 Billion
State of Space Report – Kansas City Office Market
The State of Space Report is a snapshot of the current Kansas City office market and provides detailed information that is useful for both owners and occupiers of office space throughout the Kansas City metropolitan area.
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Big Box Report – Kansas City Industrial Market
The Big Box Report is a summary of all existing, under construction and announced Class-A vacancy in the Kansas City Metropolitan market. Inquire with the Industrial & Logistics Heartland Team to receive the report.
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