Kansas City Office Market
The market recorded 116,174 SF of net absorption during the quarter, bringing the four-quarter total to 1.1 million SF. This marks the fourth 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 108,600 SF currently under construction. Vacancy decreased by 10 basis points to 16.1% and is expected to edge down toward 16.0% as the market continues to stabilize. Asking rental rates are anticipated to soften in the coming quarters, following a modest year-over-year increase of 1.1% to $22.96/SF.
Kansas City Industrial Market
‒The market recorded 7.5 MSF of positive net absorption in first-quarter 2025, the second-highest quarterly absorption total in the market’s recorded history. The absorption was a result of three primary factors: multiple build-to-suit deliveries (Ace Hardware in 1.5 MSF, Blue Buffalo in 727,350 SF and Heartland Coca-Cola Bottling in 677,000 SF); bulk building leasing (USPS subleased the 1.1-MSF Coleman building); and above-average first quarter demand resulting from a softer-than-expected 4Q24. While steady demand and a slowing speculative construction pipeline drove vacancy down 90 basis points year over year to 4.6%, the elevated net absorption recorded in 1Q25 is not expected to become a continuing trend.