Kansas City Office Market
| Average Asking Rent (Price/SF) | $21.62 |
| Vacancy Rate (%) | 12.9% |
| Net Absorption (SF) | -398,333 |
Market vacancy in Kansas City rose to 12.9%, an increase of 60 basis points from the prior quarter and an increase of 190 basis points from one year ago. The market realized an increase in asking rental rates in the second quarter of 2021, as rents climbed to a record high of $21.62/SF, up $0.31/SF from first-quarter 2021. While the office market realized an increase in asking rental rates during the quarter, tenants are often seeing more concessions in the form of free rent and tenant improvement allowances as well as longer lease terms to accommodate the ever-increasing construction costs. Total net absorption in the quarter measured negative 398,333 square feet, bringing the total for the past four quarters to negative 1.2 million square feet. Construction projects currently underway total 389,396 square feet, with no deliveries during the quarter.
Download Kansas City Office Market Report 2Q21Kansas City Industrial Market
| Average Asking Rent (Price/SF) | $4.81 |
| Vacancy Rate (%) | 4.90% |
| Net Absorption (SF) | 1,005,915 |
The Kansas City industrial sector continued the year displaying extremely strong market fundamentals with 1.0 million square feet of total net absorption during the second quarter of 2021. Net absorption during the past four quarters totaled 6.4 million square feet, ranking Kansas City 16th out of all industrial markets in the U.S., while projections indicate an additional 12.2 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 rental rates upward. Asking rent increases have been, to some extent, countered as larger structures continue to deliver to the market, pressing downward the average per-square-foot rate. Projects under construction increased significantly during the past year, increasing from 5.8 million square feet to 12.0 million square feet, with expectations that the figure will continue to rise as multiple projects in the proposal phase will officially change to “under construction” over the next six to nine months. The market realized 1.5 million square feet of deliveries during the second quarter, with projections for deliveries in 2021 to reach a record high of 14.8 million square feet. Although Kansas City only ranks 17th in overall market size in the U.S., the market ranked 11th in total deliveries during the past four quarters and 13th in under-construction square footage. Overall vacancy increased 10 basis points, from 4.8% to 4.9%.
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