2017-KC-Retail-Report-1.Pdf
Total Page：16
File Type：pdf, Size：1020Kb
2017 Liberty Commons in now open in Liberty, MO, anchored by KC RETAIL REPORT 2017 2 Academy Sports, Natural Grocers, Gordman’s, HomeGoods, and Off Broadway Shoes. NORTHWEST KANSAS CITY NORTHEAST KANSAS CITY BluHawk in South Overland Park, KS represents one of the only greenfield developments under construction in the Kansas City Metro. WYANDOTTE The year of 2016 was a unique year on many includes demolishing the almost 900,000 sf of existing COUNTY EASTERN The continued resurgence of the downtown/ JACKSON fronts, and retail development and leasing midtown/plaza submarket has been a boon mall space and replacing it with 744,000 sf of new COUNTY was no exception. Whether caused by the retail, a 60,000 sf office building, 82,000 sf hotel, 150 to KC retail as occupancy reached a whopping CENTRAL uncertainty spurred by a fierce election or the 97%. As occupancy rose, the average lease RECENT SUBMARKET multifamily units, and 66,500 sf of restaurant pad sites. KANSAS CITY The existing Macy’s store is the only portion of the mall NORTH continued growth of e-commerce, retailers, rate dropped from $15.88/ft in 2015 to ACTIVITY JOHNSON that is planned to be retained. particularly large format retailers, will likely $14.17/ft. This can likely be attributed to COUNTY remain cautious going into 2017. However, the “less than ideal” locations finally being RELATIVE CHANGE FROM PRIOR YEAR In one of the most notable tenant announcements of the past year was not without its share of leased as the number of available spaces has 2016, Costco will open a new 156,000 sf store at North good news as many areas of Kansas City saw dropped significantly. OR OR LR LR Platte Purchase Drive and NW 88th Street. Currently SOUTH under construction, this project is anticipated to open in KANSAS encouraging signs of growth and opportunity SOUTH CITY When broken down by retail subcategory, OCCUPANCY RATE LEASE RATE late spring and should be a catalyst to growth in an area in the commercial real estate market. JOHNSON SOUTHEAST the average rental rates remained relatively NORTHWEST KANSAS CITY that was hit hard by the decline of Metro North Mall. COUNTY TRADE AREA RECENT SUBMARKET While the overall retail market was generally stable for community, lifestyle, and strip ACTIVITY The Northwest KC submarket CENTRAL KANSAS CITY slower than expected, there are some centers throughout the year. Neighborhood OR LR remains strong, anchored by Zona Kansas City’s oldest and most portions that faired particularly well. Among centers, typically anchored by grocers, posted OR LR 1.3% 4.4% Rosa Shopping Center and Tiffany unique shopping center, the Country those were ‘mom and pop’ shops who are a notable improvement for the second year Springs MarketCenter. Soon a new development will 1.7% -10.8% Club Plaza, officially sold for $660 bolstered by the public’s increasing preference in a row with average rental rates going from join these established centers: Edgewood Farms, to billion “Innovation Campus” on the former site of and TJ Maxx joined an existing line up of tenants that million to a partnership of industry veterans, Taubman OR LR Bannister Mall is ready for 3,000 employees to start included Price Chopper, Advance Auto Parts, and toward locally owned stores and restaurants $11.16/ft to $11.46/ft. be located in the southeast quadrant of I-29 and Barry Centers and Macerich Co. Since the new ownership was 1.3% 4.4% work in early 2017. This project plans to add up to ten Dollar Tree. which provide a unique experience many Road. At the new site, Main Event Entertainment is announced, several tenants have joined the prestigious Many power centers throughout the nation new buildings over the next ten years to house 16,000 national chains lack. under construction on their third metro location and lineup on the Plaza including Tesla Motors, Warby Red Bridge, Ward Parkway, and Truman’s Marketplace have had difficulties increasing lease rates as new well-paid employees, including a high percentage will be joined by an additional 170,000 sf of retail and Parker, Eddie V’s Prime Seafood, and a flagship Niall all exemplify the trend of bringing old and tired centers The grocery market remains another bright the market for junior box spaces (15,000 sf to of engineers. This is undoubtedly going to have a restaurant space. Luxury Watch store. back to life. All three have strong retail fundamentals spot in the retail market. Competition 40,000 sf) has seen very little activity compared dramatic impact on local retail and residential markets Tiffany Springs welcomed new tenants including which include existing population densities, growing continued at a high level in 2016 and is to past years. Therefore, it is somewhat Still under construction just minutes from the Country as daytime population densities increase substantially Marshalls (which backfilled a portion of the former local employers, and solid household incomes. expected to continue into the coming year. surprising that power center rents in KC Club Plaza is the Whole Foods-anchored Brookside 51 over the next decade from this project alone. Sports Authority), Endurance House cycling store, on the University of Missouri- Kansas City campus. The SOUTHEAST TRADE AREA While there were fewer new grocery store increased to $15.72/ft in 2016 from $13.53/ and most recently, a new format Aldi. The store is Just minutes from this state of the art campus, project is planned to open in September of 2017 and The Southeast submarket openings than 2015, many grocers made ft one year earlier. This is likely a testament to larger, brighter, and more “stylish” than the chain’s LANE4 recently completed the first phase of the OR LR includes 170 luxury apartments and 11,000 sf of office continues to grow as the bedroom substantial upgrades to existing stores. the relatively active QSR chains who are able traditional stores as Aldi has announced a move redevelopment of Red Bridge Shopping Center. Red above the specialty grocer. 0.7% 4.9% communities of Lee’s Summit, to pay top-of-the-market rents for outparcels, toward a healthier, more organic product line. Bridge was originally developed by the legendary Perhaps due to oversaturation, national quick Belton, and Raymore remain vibrant due to strong with rents reaching into the $30s, $40s, and Despite the challenges of urban redevelopment, Kansas JC Nichols Company but suffered from serious lack service restaurants (QSR) as a whole did NORTHEAST KANSAS CITY schools and low cost of living. even upwards of $50 per square foot in some City’s central submarket has produced quite a bit of of upkeep and needed improvements. New tenants not see the same generous year-over-year The Northeast submarket is home activity over the last decade. The multifamily market include Euston Hardware, which opened in January Summit Woods and Summit Fair, both located at cases. These tenants depend on expansion OR LR increase that has been achieved in recent to one of the most significant retail continues to rise, particularly in downtown Kansas City 2017; a full service fitness concept called Blue models favoring prominent spaces at high I-470 and Hwy 50, remain the dominant shopping years. However, it was not uncommon to 3.1% -3.9% developments completed in 2016: as well as in the Crossroads and Westport districts. This Bicycle; and SERC Physical Therapy. The upcoming destinations of Lee’s Summit. Dicks Sporting Goods traffic intersections which are dominated by see this type of tenant paying top-of-the-line Liberty Commons. Located at I-35 and Hwy 152, the has led to increased development and redevelopment year is expected to produce several exciting tenant announced that it will relocate and expand from market rents in order to out-position their power centers and national retailers. development totals 325,000 sf and is anchored by in all three areas, focused on office and retail/ announcements at the rejuvenated center. Summit Woods into a brand-new 50,000 sf store now restaurant uses to serve the added population. competition, especially in key trade areas at As we take a closer look at each submarket in Academy Sports, Natural Grocers, and Gordman’s, The redeveloped Ward Parkway Shopping Center under construction at Summit Fair. H&M will also regional intersections. the KC Metro compared to years past, there are now open. HomeGoods, Off Broadway Shoes, A much anticipated new conference center hotel near continues to see success as a power center/indoor join the tenant mix, leasing 20,000 sf in another new is a noticeable trend of redeveloping obsolete and a host of other small shop and junior box tenants the Kansas City Convention Center continues to make mall and has begun construction on its newest phase: building to be shared by an undetermined tenant. Overall retail occupancy in the Kansas City will soon follow. This new development fills a need properties to serve the ‘experience-driven’ strides toward a groundbreaking with an approved TIF an outdoor courtyard featuring six new restaurants on A proposed development planned adjacent to Summit Metro remained at 91% over the course of for more Class-A retail space as the market has seen package and other public-private financing agreements. the south end of the center. Announced restaurants Fair, named Summit Place, announced in 2016 that 2016. According to Costar Group, the average modern day consumer. This seems to be tremendous growth over the last decade. occurring primarily in the urban core of KC, The latest plan calls for an 800-room Hyatt that could include Ted’s Escondido, The Garage Burgers and Beer, Cabela’s would build a new store as part of the plan.