Kansas City's Real Estate Dealmakers

KANSAS CITY’S REAL ESTATE DEALMAKERS APRIL 27, 2018

ADVERTISING SUPPLEMENT TO THE KANSAS CITY BUSINESS JOURNAL GETTY IMAGES C2 ADVERTISING SUPPLEMENT TO THE KANSAS CITY BUSINESS JOURNAL The president’s message

he Kansas City curriculum, demon- strongest chapters In May, I will be and Q10 Triad Cap- Chapter of strated a strong and in the CCIM Insti- traveling to Wash- ital Advisors, Inc. A T CCIM (Cer- consistent transac- tute. Membership ington, D.C. to meet complete list of all tifed Commercial tional history, and is open to anyone with Missouri and of our valued spon- Investment Mem- successfully passed regardless of des- Kansas represen- sors can be found in ber) is once again a national compre- ignation and offers tatives to discuss this insert. pleased to partner hensive exam. Only an excellent oppor- issues critical to I would also like with the Kansas City about 6 percent of tunity to network the commercial real to thank our dedi- Business Journal to commercial real with top real estate estate industry. This cated board of direc- publish this annual estate practitioners professionals in is done each year tors and volunteers insert. This supple- nationally have our market. More in conjunction with who work tirelessly Bruce Johnson, ment features timely earned this designa- than 100 area pro- the National Asso- to make all this hap- CCIM articles written by tion. fessionals regularly ciation of Realtors. pen. And, of course, Vice President, local CCIM designees The Kansas City attend our monthly If you think Wash- I want to thank all Block Real Estate about the many dif- chapter is an exten- breakfast meetings ington does not of our members Services, LLC ferent areas of com- sion of the greater and numerous other listen, I would point for their support mercial real estate CCIM Institute. A networking events out that last year’s of this chapter. If and our market, and list of our chapter throughout the year. main issue was the you are not a mem- it refects the array members who have Another way in 1031 tax-deferred ber, please visit our of disciplines of our earned and hold which the Kansas exchange provision, website and con- chapter member- the CCIM designa- City chapter serves which is critical to sider joining to take ship. We hope you tion can be found its members is by our industry. This advantage of all we fnd the articles in- on the back page of hosting two of the provision survived have to offer. teresting and useful this insert. It is no required CCIM core in the new tax code Finally, I would in your day-to-day coincidence that this courses each year thanks, in no small like to direct your business. list contains many in the Kansas City part, to the effort attention to the back CCIM designees of the top producers area. The 2018 local CCIM members page of this insert. are recognized in their respective offerings, CI 102 and spearheaded. There you will fnd internationally as specialties. CI 104, will be held Our chapter is a list of the Kansas experts in commer- With about 250 at Dentons law frm, fortunate to have a City chapter’s CCIM cial and investment active members, the our education part- long list of dedicated designees. If you are real estate. They Kansas City chap- ner. This allows lo- sponsors and part- seeking a real estate have completed a ter has consistent- cal professionals to ners. I would like to service provider, rigorous academic ly been one of the attend these courses especially acknowl- I can think of no without incurring edge our annu- better resource than travel costs and time al partners: First this list of distin- away from home. We American Title, the guished profession- offer fnancial as- Kansas City Busi- als. Providing experienced legal counsel sistance in the form ness Journal, First Please enjoy this to individuals and businesses throughout of three endowed National Bank, UES insert, and we look scholarships to fur- Consulting Services, forward to see- Missouri, Kansas and the U.S. since 1909. ther offset the cost Inc., Burns & Mc- ing you at our next of these courses. Donnell, Lewis Rice event.

Bruce Johnson is a vice president of Block Real Estate Services, LLC, and specializes in the sales and leasing of ofce properties, tenant representation and real estate investment advisory services throughout the metropolitan Kansas City area. You can reach Bruce at 816-412-8442 or [email protected].

CCIM Kansas City 2018 Ofcers & Directors Bruce Johnson, CCIM Adam Abrams, CCIM CHAPTER PRESIDENT PROGRAMS

Anita Bates, CCIM Christopher Williams, CCIM VICE PRESIDENT/SPONSORS MEMBERSHIP

Frank Sciara, CCIM Andrew Van Zante, CCIM TREASURER/SECRETARY EDUCATION Real Estate | Litigation | Employment Nick Pickard, CCIM Bill Early, CCIM Corporate | Estate Planning & Probate | Taxation PUBLIC RELATIONS PAST PRESIDENT Zoning & Government | Finance | Joint Ventures Rosanne Saitta Joe Orscheln, CCIM EXECUTIVE DIRECTOR lewisrice.com | 816.421.2500 SPECIAL PROGRAMS 1010 Walnut Street, Suite 500, Kansas City, Missouri 64106 Ferd Niemann, CCIM The choice of a lawyer is an important decision and should not be based solely upon advertisements. CANDIDATE GUIDANCE APRIL 27, 2018 CCIM: KANSAS CITY’S REAL ESTATE DEALMAKERS C3 Industrial: KC meets the challenge

an the good of 2017. deal of 2017 was a tics I and II buildings City as an important times last? Much of the deliv- 927,112-square- in the Claycomo city to place money C Industrial real ered space brought foot lease signed by submarket and Jones and gain a foothold. estate advisors, in- to the market during Spectrum Brands at Development Compa- Both made signifcant vestors and develop- the last fve years Logistics Park Kansas ny’s announcement investments in Kan- ers have been asking has been speculative City in Edgerton, Kan. of a 100,000-square- sas City within the themselves this ques- in nature, mean- Another top-fve deal foot building in past year. Increased tion for the past fve ing that a developer — a 432,000-square- Shawnee. competition from the years, and Kansas is constructing a foot lease signed by supply side through- City’s industrial real building at risk, with BMS Logistics — was Betting on out the nation has estate market con- no tenant in place done on the other Kansas City caused users to take a Nick Pickard, tinues to answer the at the time of the pole at KCI Intermod- Ultimately, devel- closer look at “deals” CCIM call. announced construc- al BusinessCentre, opers and investors available in Kansas Director, The glow of the tion. Even with the proving Kansas City is must continually City, and we have Newmark Grubb industrial real estate abundance of specu- no one-trick pony. evaluate whether become better at de- Zimmer sector shines bright lative construction, Large, cross-dock demand and opportu- livering institutional across the country’s the industrial market facilities designed nity will persist. The quality buildings with commercial real es- has met or outpaced for big space users answer is determined terms advantageous tate landscape with the new deliveries have been the head- by a market’s ability to tenants. investors clamoring with positive absorp- line-grabbers in most to sustain momen- Will Kansas City’s to fnd deals and de- tion in 25 of the last U.S. markets for the tum, deliver strong industrial mar- velopers looking for 27 quarters, and the past several years. rental rates and ket continue at the sites. The National vacancy rate stands But another preva- provide viable options current rate of suc- Council of Real Estate today at 5.8 percent, lent story of the day to attract users to cess? Rising interest Investment Fiducia- according to New- is the addition of our market. 2017 saw rates and limited ries (NCREIF) reports mark Grubb Zimmer Class A, multitenant some familiar groups rental rate growth that industrial real research. buildings being built in our area make are a concern going estate has been either with smaller users the bet that Kan- forward, but indus- the best or sec- Building new in mind. Because of sas City will remain trial real estate has ond-best performing inventory the limited options a great place to do become the preferred major asset class A great deal of for users of less than business. NorthPoint asset class for com- nationwide in each the square footage 100,000 square feet Development, Colony mercial real estate quarter for more than growth during the demanding Class NorthStar, Odyssey investors. Macro three years. past fve years can be A space, there are Real Estate Capi- issues like e-com- Kansas City has attributed to big-box buildings popping tal and others made merce, U.S. manufac- mostly benefted speculative devel- up all over the metro major commitments turing, homes sales from this demand. opment catering to that can be demised through development and the auto industry According to re- users needing at least down to as small and investment. give reason to believe search from Costar 200,000 square feet. as 20,000 square The sustained the future is bright Group, Inc., the With its centralized feet in some cases. success of our mar- for industrial prop- Kansas City industrial geography, excellent Prime examples of ket has also buoyed erties for many years market in 2012 was highway systems and these front-park, new interest from to come. Locally, the 299,500,942 square robust rail infrastruc- rear-loaded buildings the likes of Exeter fundamentals of our feet with a vacancy ture, Kansas City con- are Opus Group’s 56 Property Group and market make it a rate of 6.0 percent. tinues to demonstrate Commerce Center in Brennan Investment safe bet that Kansas Since that time, it has that it is a desirable Olathe, Hunt Mid- Group who have City will see another grown 8.6 percent destination for in- west’s HMBC Logis- identifed Kansas strong year in 2018. by adding more than dustrial users. More 25 million square than half a dozen feet of space to the 200,000-square-foot Nick Pickard, CCIM, is a commercial real estate advisor with expertise in the sales and leasing marketplace, which leases were complet- of industrial properties and a director with Newmark Grubb Zimmer, a leading commercial stood at 325,323,287 ed in the metro area real estate frm based in Kansas City, Mo. Nick can be reached at 816-512-1007 or npickard@ square feet at the end last year. The biggest ngzimmer.com. C4 ADVERTISING SUPPLEMENT TO THE KANSAS CITY BUSINESS JOURNAL NKC: ‘The perfect place to do business’

new generation of Roetheli, a well-known 2017, according to CoStar residential market. Ad- entrepreneurs and entrepreneur and longtime Group Inc. ditional multifamily and A real estate investors owner of businesses based Property owners are mixed-use retail projects are discovering the unique in North Kansas City. taking an active “value are under construction opportunities North “That combined with the add” approach by making and being planned along Kansas City offers. The affordability of no earn- improvements to increase Armour Road, thanks to 4.2-square-mile munici- ings tax and a pro-busi- overall return on invest- private investments and pality sits just north of the ness, friendly, small-town ment. Older properties economic development Missouri River, connected environment make North are seeing new life as incentives. to Downtown Kansas City Kansas City the perfect adaptive reuse becomes New entertainment Richard M. by the Heart of America location to do business.” increasingly popular. Uses developments also add to Lanning, Jr. Bridge, and is strategical- for older building stock the area’s appeal. North ly located for industrial, Redevelopment include light manufactur- Kansas City offers unique SIOR, CPM, CCIM spurs growth President, offce, entertainment and ing, entertainment, retail walkability to brew pubs, NT Realty, Inc. residential purposes. The city’s abundant and offce and co-working restaurants, an historical Those who have worked supply of industrial facil- spaces for creative services movie theater, outdoor in North Kansas City’s ities includes 338 prop- and technology-based and indoor ftness facil- industrial district for years erties totaling 17,513,795 businesses. ities, warm and inviting are eager to share a laun- square feet. A variety of Investors and develop- bakeries and coffee shops, dry list of reasons why the small- to medium-sized ers continue to fuel growth carefully curated boutique city is a great place to do local businesses are fea- in North Kansas City by retail stores and a host of business. tured alongside regional investing in all types of service businesses. The “Its central location and and national distribu- commercial real estate. city is transforming into a easy access to all parts of tion and manufacturing New row houses, patio and pedestrian-friendly, live- the metro area allow us companies. Vacancy for single-family homes and work-play community, to attract a greater pool the industrial product is multifamily and senior with access to bike trails of talent, both employees exceptionally low, only apartments have contrib- and vendors,” said Joe 3.9 percent at the end of uted to the growth in the See NKC, Page 5

Richard M. Lanning, Jr., SIOR, CPM, CCIM, is president of NT Realty, Inc., the largest service provider of commercial real estate in North Kansas City. NT Realty, Inc., manages and leases 60 buildings comprised of more than 3.1 million square feet of industrial, ofce and retail properties with over 250 tenants. He also serves as president of the North Kansas City Levee District. Richard can be reached at 816-221-2300 or [email protected]. APRIL 27, 2018 CCIM: KANSAS CITY’S REAL ESTATE DEALMAKERS C5 Recruiting and retaining the best talent

uccess for a commer- stand out from the pack careers. cial real estate frm is every time. “Leadership Leadership should be S driven by talent. With • Entrepreneurial spirit: should be equipped to add to the it, your potential is lim- Brokers are expected to broker’s professional de- itless, and without it, you make things happen for equipped to add velopment from day one. aren’t likely to last long. themselves and their cli- to the broker’s A simple orientation is That’s why identifying and ents without a real blue- not enough and should be developing new brokers is print for every situation. professional supplemented with foun- critical to sustained suc- When interviewing candi- development dational coursework and cess in this industry. dates, ask them to provide training. Allowing new Mike Klamm, There are obvious traits examples of when they from day one.” brokers to take extra time CCIM to look for, sure, but when thought on their feet and to learn the frm’s plat- Managing Director, you go beyond grades or found innovative solutions come more sophisticated forms and business prac- CBRE – Kansas City degrees, you can get to the to complex problems even and more necessary each tices will make them more heart of what will carry a outside of a professional passing year. New brokers comfortable speaking to young broker through the environment. LinkedIn who have demonstrated the frm’s strengths with ups and downs of the real founder Reid Hoffman has willingness to embrace future clients. estate market. Here are very famously pontifcat- technology and see the CBRE is fortunate to three traits that can help ed that an entrepreneur is vast potential it offers will have dedicated coaches identify who has what it someone who jumps off a be far better off than their running each of our local takes to produce for years cliff and builds a plane on counterparts who do not. market areas. Managing to come: the way down. It is that After you fnd candi- directors can devote 100 • Client-focused en- same spirit and mentality dates you feel have real percent of their time and thusiasm: Interpersonal that carry brokers to de- potential, take the pro- energy to growing the skills have become harder liver results in good times cess to the next level by business, and the develop- and harder to come by, so and bad. matching those recruits ment of young profession- when you see confdent, • Willingness to em- to senior professionals as als is a key component to well-spoken candidates, brace new technology: mentors. A broker’s frst our growth. don’t think another one is There is a wave coming few years are never easy Adding new profes- right around the corner. through our industry in but pairing new brokers sionals requires large Building new relation- the form of new technol- with someone who has investments of time and ships is a foundational ogy platforms, and before been in their shoes can resources if you want to element of our work, and too long, if frms don’t set a young associate up do it right and keep them it is not an easy thing to catch up or catch on, they for much more success producing on your team teach. Young brokers who will be bested by competi- down the line. Paying for the long haul. It takes genuinely want to fght to tion in every pitch meeting attention to both parties’ more than just a passing deliver quality outcomes they go to. Understanding personalities as well as commitment to the pro- for their clients and have how to apply these tools as their strengths and weak- cess. But if you put in the the confdence to put a means to deliver de- nesses can create a team work, it will pay dividends themselves out there will sired outcomes will be- that elevates both brokers’ for you and your business.

Mike Klamm, CCIM, is the managing director for CBRE – Kansas City. Mike’s 35+-year career in commercial real estate spans work in property management, asset management and investment sales. For the past eight years, he has been the local market leader for CBRE. Mike currently serves as board chair for the CID in downtown Kansas City, Mo. and donates his time to several other community-related boards. He can be reached at [email protected] or 816-968-5847.

NKC, from Page 4 time connection fee. tiatives designed to foster ment, compared to $45.1 City government con- economic development, million in 2016, and 2018 tinues to maintain a including a new master appears to be continuing and public green spaces. pro-business atmosphere. plan, zoning ordinance this trend.” Businesses are excited to Staff is friendly, knowl- updates, the Burlington The founding fathers offer these amenities to edgeable and always Corridor Complete Street positioned North Kansas their employees. willing to assist businesses Plan, the Armour Road City for success in 1903 Improvements and residents alike. The Complete Street Plan, the when industrial devel- abound police and fre depart- Gateway Signage Master opment began, and the ments proactively address Plan and a 58-acre Armour location has proven itself Technology invest- public safety for busi- Road Redevelopment Area. valuable for generations. ments play a key role in nesses using a Communi- Keeping a watchful eye Investors in North Kan- fueling business growth. ty Oriented Policing and over the progress is Sara sas City real estate are The city’s complete un- Problem Solving Unit, the Copeland, community now experiencing higher derground fber network, Crime Free Business Pro- development director for occupancy, increased rents KCFiber/liNKCity, offers gram and the Community North Kansas City. and appreciation in value. businesses dark fber Risk Reduction Program. “We are defnitely in the There is no better time options and speeds from Residents and businesses midst of a major growth than today to look to North 2 megabits per second up enjoy quick response times spurt,” Copeland said. Kansas City to maximize to 100 gigabits per second. from both departments. “During 2017, the city your return on investment. Residents receive 1 gigabit The city has recently issued permits for $118.7 per second service for no adopted many new ini- million in total develop- monthly cost with a one- C6 ADVERTISING SUPPLEMENT TO THE KANSAS CITY BUSINESS JOURNAL Life after Amazon — Is everybody going to sink?

s retail dead? Or at course, the transforma- The rhetoric and con- though in different seg- least drowning? If tional transparency, se- ventional wisdom push ments than the strug- I you ask the aver- lection and convenience a narrative that retail is gling retailers making age citizen or read the of e-commerce. dying when, in fact, re- the front page, the reuse headlines, you may be Despite these chal- tailers opened over 4,000 of existing space and the inclined to believe this lenges, the last few years more stores nationwide changing landscape to to be the case. Sure, the have proven that brick- than they closed in 2017, experiential retail. traditional department and-mortar stores are according to a report of If I were omniscient, and big-box stores have not going away. On the the IHL Group. In the I probably would not be taken on water or com- contrary, e-commerce Kansas City metro area, spending my time writ- pletely gone under due retailers are now focus- vacancy rates fell from ing pro bono articles and Ferdinand to, among other things, ing on an omnichannel 7.2 percent in 2016 to instead be doing what- Niemann, Amazon. But, the pain retail strategy, with 5.9 percent in 2017, and ever Jeff Bezos is doing Esq., MBA, CCIM felt by struggling retail- the most obvious ex- average rental rates in- right now. Nonetheless, Director ers can be attributed to ample being Amazon’s creased from $12.63 per below is a humble at- of Development much more, including acquisition of Whole square foot to $12.99 per tempt at a synopsis of and Acquisitions the following: overbuild- Foods — undoubtedly an square foot, according problems facing retail, Christie ing, a shift in consumer investment play focused to the Block Real Estate coupled with some prac- Development spending habits from on longer-term physical Services 2018 Real Estate tical solutions. Associates, LLC material goods to expe- Amazon locations and Report for Metropoli- riences, retailers’ lack of not just selling over- tan Kansas City. These NIMBYs adaptation and continu- priced groceries to soccer numbers tell the story of Obstacle: The not-in- ous improvement and, of moms. growing retailers, al- my-backyard (NIMBY)

Block Real Estate Services, LLC Presents its CCIMs The CCIM designa� on is awarded to professionals who have completed graduate level courses in fi nancial analysis, market analysis, and investment decision analysis. They are recognized experts in the disciplines of Kenneth G. Block, SIOR, CCIM Harry P. Drake, CCIM, CPM Donald F. Gessen, CCIM Bruce Johnson, CCIM Ma� hew L. Levi, CCIM Brad S. Simma, CCIM Ma� Ledom, CCIM Brent Roberts, CCIM Managing Principal Execu� ve Vice President/ Vice President Vice President Vice President Vice President Vice President Snr. Vice President commercial and investment real estate. Offi ce/Industrial/Investment Chief Opera� ng Offi cer Offi ce/Retail Offi ce Specialist Offi ce/Industrial/Retail Block Construc� on Investment Sales Offi ce Specialist Public Rela� ons Chair

700 W. 47th Street, Suite 200 | Kansas City, MO 64112 | 816.756.1400 | www.BLOCKLLC.com

SINK, from above leaders everything you manding lower rents and where possible, perhaps have done and articulate tenant-friendly terms, creating a restaurant- what you just cannot do. such as exclusivity and and experience-driven Elected city leadership More bushes and a better co-tenancy provisions development. Active Problem: The biggest façade — sure. Limited that include steep penal- retailers will want to be problem I have found signage and structured ties against the landlord. in vibrant centers (with with elected leadership is parking for your an- Often, the rental rate is co-tenants). Plus, the … they want to be re- chor retailer — sorry, too low to allow for a developer can sell por- elected. Therefore, many but you’re going to have modest return on invest- tions of the development “leaders” bow to NIM- to tell planning staff ment, resulting in either: to a key anchor or pad BYs or special interests that this just ain’t the • The deal falling users, reducing the cost even at the expense of a Country Club Plaza, and through basis and risk and there- project they should sup- it won’t work for your • A skinny deal going by allowing otherwise port. I have had elected project. Lastly, support through, but susceptible untenable deals with the representatives tell me the real leaders in your to risk/failure other retailers to move they want to support the community (especially • The need for eco- forward. project, but they can’t if they are pro-busi- nomic development in- Another alternative to because of unions, school ness, considering you are centives, not to enrich the deliver cheaper rents is districts, Minority Busi- reading the KCBJ). developer but to essen- to avoid new construc- ness Enterprises, etc. tially “buy the tenant” tion costs by buying a Retailers — by allowing the developer tired center and reno- the real boss! Solution: Write bigger to effectively provide the vating it. This approach campaign checks! Better Problem: Retailers who tenant with a lower/sub- should be less expensive yet, put in the effort to are expanding know de- sidized rental rate than new construction listen to project stake- velopers need them to do and provide develop- holders. Show elected deals, and they are de- Solution: Be fexible ers with modest returns APRIL 27, 2018 CCIM: KANSAS CITY’S REAL ESTATE DEALMAKERS C7 Life after Amazon — Is everybody going to sink?

crowd regularly makes project approval, es- with second-story retail/ unreasonable (for exam- BYs. But sometimes, go- development more pecially when elected offce space, structured ple, the Northland Cost- ing around or over staff challenging. While retail leadership is weak and parking, walkability and co was being pressured (to elected leadership) development is typi- refuses to vote in oppo- free candy to boot! Sim- to put in voluminous bi- is the only way to get a cally not as loathed by sition of a neighborhood ilar to Margaret Thatch- cycle racks!). Moreover, project over the fnish NIMBYs as low-income for a transformational er’s wisdom that “the scope creep and design line. You will still have to housing, this obstacle project (for example, 10 problem with socialism criteria often push the work with staff to im- arises in many instances. neighbors disapprove is that you eventually development into the plement the project (and As my wife reminds me, of a project that greatly run out of other people’s untenable position of on subsequent projects), it is nice to live close to benefts the community money,” letting city staff being fnancially infea- so proceed respectfully, the grocery store, gas at large, with the loudest plan your project will sible. (The rising costs of cautiously and sparingly station and Target or voices drowning out the cause you to run out of construction materials when moving forward Walmart — just not too rest). money. and labor make projects in opposition to staff’s close. Undoubtedly well-in- hard enough to pencil, recommendation. (You City staf tentioned and more which makes unnec- should also support Solution: Work with Obstacle: While NIM- community-minded essary costs put on the leaders who fght for homeowners (and avoid BYs can add aggrava- than a project-centric project by staff or spe- fewer regulations, lower referring to them as tion (and costs) to your developer, city staff cial interests harder to impact fees and less de- NIMBYs). Listen to their project, city planners can should advocate for the shoulder.) velopment add-on costs. concerns, get their input, transform your project best project they can get. and try to appease them. from a renovation of a But, rigid rules in a one- Solution: Work with Neighborhood support strip center to a utopian size-fts-all code make staff similar to how you can be the lynchpin to mixed-use project — some staff comments would work with NIM- See SINK, below

700 W. 47th Street, Suite 200 | Kansas City, MO 64112 | 816.756.1400 | www.BLOCKLLC.com

while delivering the projects as a TIF com- cost-beneft analysis to tell you which city Where do we go space at acceptable rental missioner in more than when evaluating incen- has seen vast amounts from here? rates for retailers. a half dozen munici- tives. of commercial growth As retail trends evolve palities, and I worked I have seen cities take while the other has a Anti-incentive crowd and change, as they for three years at White opposite actions. For population struggling to always do, real estate Problem: The anti-in- Goss as an incentives example, offcials in reach 5,001. professionals must adapt centive crowd is pretty attorney. So I have seen one city admitted they A mentor once stat- and charter a course fred up — no incentives, the good, the bad and were giving away a large ed it best: Capital goes towards survival and no way, no exceptions! the ugly. And certainly portion of the farm but where it is welcome and success. The waters re- some fat deals resulted recognized it was nec- stays where it is appre- main choppy, and there Solution: The border war in an overly subsidized essary to get the/any ciated. will certainly be chal- as well as the sales-tax developer and a swift development — basi- Love them or hate lenges along the way. chasing among munic- feecing of the other cally deciding a piece them, incentives move But the journey is worth ipalities are partly to stakeholders. of a bigger/real pie was the needle, and we can it for those who make it blame for the bad rep- But, incentives are better than no pie at all. expect them to be a fac- across. For those who do utation given to incen- like money — amoral In contrast, leadership of tor in development for not have the strategies tives. This narrow view not moral or immor- a town of 5,000 people years to come, at least as — or the stomach — for ignores the reality that al by nature — and in said they would only give long as local government the journey ahead, there incentives are needed on some cases, incentives away a 50 percent TIF has the autonomy to take is always safe harbor … some projects. are necessary to get the if a developer brought action irrespective of with AMZN stock avail- I worked for Jackson deal done. Policymakers a Costco … to a town of the ancillary effects on able for a cool $1,579 per County for fve years and stakeholders need 5,000 people! competing or impacted share. and analyzed dozens of to do a comprehensive It doesn’t take a CCIM municipalities.

Ferdinand Niemann, Esq., MBA, CCIM, is a real estate investor, broker and attorney focusing on retail redevelopment and development as the director of development and acquisitions at Christie Development Associates, LLC. Christie is a regional retail development frm with special expertise in public-private partnerships. He can be reached at [email protected] or 913-649-4500. C8 ADVERTISING SUPPLEMENT TO THE KANSAS CITY BUSINESS JOURNAL Multifamily: KC’s evolution continues

ith consis- a strong recovery at we expect inventory — which tend to far most recent period tent popula- the beginning of this growth to remain be- outweigh their initial of increased product W tion growth, latest cycle as well tween 1.5 percent and capital injection. delivery, the market a favorable Midwest- as continued job and 2.5 percent annually. needed a huge number ern location and a wage growth. Kansas A look at lending of units to make up developing transpor- City employment is Investment sales On the debt side, for the lack of delivery tation system, Kan- forecast to expand by environment the outlook remains over the prior decade. sas City continues to 18,500 jobs (1.7 per- During the past few optimistic because life The overbuilding attract large employ- cent) during the next years, the multifamily insurance companies, “boogeyman” arises ers and consolidate year, up from 13,300 sector has been the banks, commercial because developers Michael Sullivan, its status as a desti- in 2017. Additional darling of the com- mortgage-backed continue to deliver Senior Director, nation for both travel market highlights: mercial real estate securities (CMBS) and highly amenitized, Investment Sales and investment. As • Occupancy — world, bringing in government-spon- luxury product to a Berkadia we enter into the 10th Despite a year-over- record levels of invest- sored enterprises handful of the most year of the current year jump of 20 basis ment from both pri- (GSE), such as Fannie dynamic areas in town market cycle, Kansas points, vacancy num- vate and public groups Mae, Freddie Mac rather than vary- City is beginning to bers across the metro seeking higher levels and FHA/HUD, are all ing the product type stake its claim as a remain slightly above of returns for their vying to put debt out and delivering more business-oriented 5 percent, which is capital. Today, inves- in the market. In ad- modest housing across metro with a signif- still well under the tor confdence in the dition to foaters, the a wider swath of the icant supply of new market peak of 11.3 stability of the multi- most popular fxed- city. multifamily stock in percent in 2003. family sector remains rate products of 5 to Here’s the rub: It is core submarkets. Apartment occupancy strong, despite robust 20 years offered by extremely diffcult to The big question is expected to remain new supply levels and GSEs remain the most deliver even margin- heading into 2018 is elevated as employ- concerns about rising desirable debt product ally proftable work- whether the market ers accelerate hiring infation and aggres- for multifamily prop- force-type housing John J. Schorgl, has peaked and is across Kansas City sive interest rate hikes. erties because of their without substantial MBA, CCIM possibly headed for a during the next year. As the cycle con- ease of assumption, incentives, especially Managing Director, correction or whether • Rent growth — tinues to mature, in- higher leverage levels in the areas that need Mortgage Banking the sector's bull run Effective rents investor groups fall into and the ability to lever it most. The commer- Berkadia will continue. Regard- creased 1.5 percent to two primary groups: up during the loan cial real estate indus- less, the fact remains end 2017 at $939 per value-add buyers who term through supple- try has been notori- that we are reaching month as apartment are looking to infuse mental loan oppor- ously slow to adopt the last phase of this operators capitalized syndicated capi- tunities. Owners who new technology, cycle, and this market on the rising payrolls tal into a project to were doing 7- to 10- but that tide seems is near, if not already and healthy occu- generate the returns year terms are opting fnally to be turn- at, its peak. pancy rates across required by their for longer-term fxed ing. Going forward, The good news is the metro. This trend equity sources and rates primarily due to our industry needs that Kansas City’s is set to continue, as groups focused on the 10-year U.S. Trea- innovative companies market fundamentals annual effective rent quality and seeking sury note going up 50 that are working to are suffciently sound growth is forecast stable assets that will basis points in the last develop products that to support the current to be 2.3 percent in generate steady cash four months. help us overcome the market for the fore- 2018 and average 2.5 fow. Life insurance com- rising labor, wage and seeable future, and we percent from 2019 to Despite the at- panies also play a large material costs and generally don’t expect 2021. This is a great tention paid to the role in fnancing all fnd a way to deliver to see any signifcant sign since Kansas development of types of commercial workforce housing market corrections for City had averaged 1.3 new Class A assets, and multifamily prop- without using local, at least 18 months. percent since 1996. Class B assets con- erties. Although this state or federal aid. • Development tinue to be the most fnancing is mostly Looking forward, Market rundown pipeline — sought-after product lower leverage, in- the demand for mul- After several years Metrowide, 3,955 type, regardless of vestors can lock rates tifamily product is of sizzling improve- units were added the acquisition strat- at application, which showing no signs of a ments to market fun- to the inventory in egy. Stable cash-fow is very attractive if slowdown. The pent- damentals, 2017 saw 2017, up more than groups pursue them treasuries are volatile. up demand from retrenchment in the 15 percent from 2016. because they offer Banks are also very millennials, who are multifamily market. Apartment absorption high-enough quality active in providing putting off major life Rent growth cooled heightened 14 percent product and are built bridge and construc- events longer than amid robust develop- year over year. With in solid-enough sub- tion fnancing, while earlier generations, ment, and occupancy 3,220 absorbed units, markets. Value-add CMBS shops have tak- along with the explo- levels — although we’ve more than groups pursue them en the opportunity to sion of downsizing solid — began to de- doubled the market’s because by purchasing insert themselves into baby boomers and cline in some metros, historical average. these properties and the remaining gaps in those in search of including Kansas City. We’re confdent that giving them a face- the market. affordable, workforce That said, the the fourth quarter of lift, investors can pay housing are expect- Kansas City market 2017 will mark the less upfront, add a few The overbuilding ed to drive absorp- remains in a solid peak in multifamily amenities, boost rents ‘boogeyman’ tion and overall rent position thanks to deliveries, although and reap the profts Before Kansas City’s growth for years.

Michael Sullivan, a senior director of investment sales with Berkadia, focuses on the acquisition and disposition of multifamily assets throughout the Midwest. He has been involved in more than 100 investment real estate transactions valued at more than $700 million. He can be reached at [email protected] or 816- 759-0369.

John J. Schorgl, MBA, CCIM, managing director of mortgage banking at Berkadia, specializes in the placement of debt for commercial and multifamily real estate projects nationwide. Throughout his 20-year career in mortgage banking, John has provided clients with permanent, bridge and construction debt fnancing on all types of income-producing properties. He is an expert in placing loans with life insurance companies, conduit lenders, banks and each of the agency lenders. He can be reached at [email protected] or 816-759-0367. APRIL 27, 2018 CCIM: KANSAS CITY’S REAL ESTATE DEALMAKERS C9 Demand surges for ofce space

he Kansas City $18.50 per square buildings can quickly feet), the overall area occupancy and pro- central busi- foot, while three reach Crown Center will probably need a vides a unique com- T ness district separate buildings and the southern end major redevelopment bination of immediate (CBD) is in the midst had availabilities of of the Kansas City project to attract a access to the CBD via of a major revival at least 30,000 square streetcar line. Anoth- sizeable number of the Broadway Exten- as tenants from the feet and asking rates er alternative is the mid-sized tenants. sion, connections to suburban submarkets of $22.50 per square entertainment district With the exception areas throughout the consider relocating foot or higher. of Westport, which of the impressive Northland and sur- to the urban core and A few years ago, borders the southern repurposing that has prisingly easy access out-of-market com- the Crossroads was edge of the Midtown taken place at Charles to Johnson County panies entering the an affordable alterna- corridor and is only a B. Wheeler Downtown using I-635. As the Suzanne Dimmel, area focus on Down- tive for tenants who few minutes from the Airport, North Kansas CBD continues to CCIM town. At the end of wanted to be near Plaza. City does not have draw new tenants and Director, 2017, the CBD’s offce Downtown. Today, The areas im- any real offce space. prices in the Cross- Cushman & vacancy rate was at the Crossroads is the mediately to the However, just past roads continue to es- Wakefeld its lowest level in a most desirable area east of Downtown Charles B. Wheeler calate, current options decade, and more for many tenants, don’t have offce Downtown Airport is within Downtown major tenants will be especially as the space. Although the the Briarcliff area and may not be able to fll moving into the area area’s reputation as downtown Kansas a selection of existing the increased demand in 2018. The current a destination for tech City, Kan. area does offce buildings and for space. As the momentum in the companies has grown. have some options potential build-to- market evolves, more offce market and the The most signifcant for users looking suit sites. companies may fnd ongoing residential speculative invest- for larger spaces Briarcliff has main- attractive alternatives boom will push the ment in the CBD in (100,000+ square tained a high level of in the Midtown and vacancy rate lower more than 20 years and put upward pres- was the redevelop- sure on lease rates ment of Corrigan Sta- Suzanne Dimmel, CCIM, is a director in Cushman & Wakefeld’s Kansas City ofce. Suzanne is throughout the CBD. tion, the frst phase one of the top real estate professionals in the Kansas City area receiving numerous awards for RJ Trowbridge, Offce space in of which is now 100 her professional services, including the 2017 Kansas City Business Journal Women Who Mean Senior Associate, the CBD is becoming percent occupied at Business. She can be reached at [email protected] or 816-221-2200. Cushman & tight, which means rents that would have Wakefeld RJ Trowbridge is a senior associate at Cushman & Wakefeld and is a member of the ofce tenants are facing an been unimaginable brokerage division. He works on tenant and landlord representation projects in the Kansas increasingly diffcult in the CBD only fve City metropolitan area as well as owner/user sales and leasing. He can be reached at challenge of fnding years ago, and con- [email protected] or 816-221-2200. affordable space. No struction is underway one is pretending on the second phase. there is a shortage of offce space in Down- Attractive town, but the days alternatives arise of fnding a bargain The renaissance appear to be gone. in the CBD should be From the end of 2015 celebrated, but as it through the end of continues, new ques- WE PARTNER 2017, asking rates for tions will arise, par- CBD offce space in- ticularly for tenants creased 11.6 percent. who are looking to Increased demand locate close to Down- has been particu- town but are not in larly evident in the a position to pay the Crossroads, where premiums the Cross- the weighted-average roads area now de- asking rate at the end mands. New specula- of 2017 was $22.23 tive construction will per square foot. To not help resolve the put that in context, issue, as the costs will Bringing your vision to life requires more than a blueprint the weighted-aver- necessitate premium and a gilded shovel. It takes a deep understanding of age asking rate for rents. A more likely how your building will impact those who occupy it. And the entire Kansas alternative for ten- collaborative leadership to get the job done right. City market was just ants is offce space in $19.85 per square nearby areas. That’s what makes our buildings. foot. One potential That’s what makes us McCownGordon. At the end of 2015, option is Midtown, the weighted-av- the corridor that runs mccowngordon.com erage asking rate in between Main Street the Crossroads was and Broadway Boule- $19.20 per square vard from 31st Street foot, and a combined to Westport Road. total of 85,000 square Offce buildings in feet was available that area offer easy for $18.50 or less. At and direct access to the end of 2017, only the Crossroads using one Crossroads offce city streets and the space of more than River Market using 6,500 square feet was I-35 to loop around available with an ask- Downtown. People Diagnostic Imaging Center–Overland Park, KS ing rate of less than in Midtown offce C10 ADVERTISING SUPPLEMENT TO THE KANSAS CITY BUSINESS JOURNAL CRE remains a preferred asset type

ll capital pro- the most competi- viders main- CHANGE IN ORIGINATIONS FROM 2016 TO 2017 tive interest rates. A tain a strong Portfolio lenders are appetite for com- also expanding their mercial real estate in HOTEL INDUSTRIAL offerings with more 2018. The Mortgage construction/per- Bankers Associa- manent, bridge and tion (MBA) reports +26% +22% joint-venture equity that commercial and programs. multifamily originations for 2017 in- CMBS/securitized Doug Bates, lenders CCIM creased by 15 percent MULTIFAMILY OFFICE Vice President, over 2016, resulting The CMBS mar- Grandbridge Real in another record ket continues to be Estate Capital’s year for the industry. +17% +12% active after enjoy- Kansas City ofce Multifamily origi- ing a considerable nations were prolifc, increase in origina- highlighted by Fan- tion volume in 2017. nie Mae and Freddie HEALTH CARE RETAIL CMBS lenders have Mac producing a adjusted to new re- record $140 billion quirements that they in loans nationwide +9% -21% hold a portion of in 2017, and once each securitization again, their loan tar- place cash fows to rate, student, mobile grams: construction/ throughout the term gets have increased support sustainable home and afford- permanent — with of the loan, which is for 2018. Life in- debt service cover- able senior housing leverage up to 85 intended to prevent surance companies’ age ratios. For new communities. Both percent, a 40-year the overly aggressive originations were development, banks Fannie Mae and fully amortizing loan underwriting that in line with 2016, are increasingly Freddie Mac contin- structure and rates occurred before the totaling $77 billion, selective on con- ue to expand product in the low 4-percent fnancial crisis. and this industry has struction lending, offerings to increase range — and ac- CMBS lend- also increased its requiring more cash originations. Each quisition/refnance ers generally offer goals for 2018. The equity from develop- agency also has — with leverage higher leverage than commercial mort- ers, particularly for “green” initiatives up to 85 percent, portfolio lenders; gage-backed securi- speculative develop- that offer signifcant a 35-year, fully however, CMBS ties (CMBS) market ment. rate reductions for amortizing struc- loans are general- enjoyed a 24 percent The three major qualifying proper- ture and a rate in ly less fexible and increase in origina- lending sources for ties. Newer popular the mid-3-percent their rates are high- tions over 2016 with permanent, fxed- products include: range. Grandbridge er. CMBS lenders $95 billion in securi- rate, non-recourse • Pre-stabilized/ has a proprietary will lend against all tized loans. fnancing are gov- lease-up programs bridge-to-HUD loan property types, in- Loan originations ernment-sponsored for new construction program that can cluding unanchored increased for nearly enterprises (GSEs), • Modifcation/ help facilitate these retail centers and all property types such as Fannie Mae, rehab programs for opportunities. hotels. in 2017 (see table). Freddie Mac and value-add opportu- In summary, the Despite the positive FHA/HUD; portfo- nities Portfolio lenders capital fow into momentum, lend- lio lenders, such as • Credit facilities Life insurance commercial real es- ers are cautiously life insurance com- for large and institu- company lenders tate remains strong. optimistic, as the panies; and CMBS/ tional borrowers continue to fo- Lenders continue headwinds of strong securitized lenders. In addition to cus on core Class A to expand product market fundamen- Permanent lenders multifamily, FHA/ and B assets in the offerings in an effort tals and economic also offer bridge HUD make loans for four major prop- to increase market activity encounter loans, which can health care facili- erty types. Their share and meet their tailwinds of a poten- facilitate an acqui- ties. With the recent programs are gen- borrowers’ needs. tial rising interest sition or recapital- pullback by banks on erally more conser- Rates have increased rate environment ization, to reposition multifamily con- vative than agency moderately since the and infationary the property through struction lending, and CMBS lenders; end of 2017, however pressures. The MBA renovations, re-ten- HUD has become however, life in- they remain his- forecasts commer- anting and/or im- a more attractive surance companies torically low. With cial and multifamily plementing a new option for both new offer competitive so many options mortgage origina- investment strategy. construction and options for timing and products avail- tions to be $549 bil- major redevelop- to lock rates and able, Grandbridge lion in 2018, a total Agency (GSE) ments. HUD also more diverse loan can help you navi- similar to 2017. lenders works particularly structures. Portfolio gate the channels to Lenders are ex- The agencies make well for historical lenders can pro- identify and procure ercising disciplined loans for multi- rehab projects. vide fxed-rate loan the best fnancing underwriting with a family properties, HUD offers two terms ranging from available for any strong focus on in- including market main loan pro- 5 to 40 years with given property.

Doug Bates, CCIM, is a vice president in Grandbridge Real Estate Capital’s Kansas City ofce. Grandbridge is one of the largest commercial mortgage banking frms in the United States, with over $7.3 billion ($740 million in Kansas City) in transaction volume in 2017. Grandbridge’s investor base includes agency lenders (Fannie, Freddie, FHA/HUD), life insurance companies, CMBS lenders, mezzanine and preferred equity providers as well as proprietary capital. Doug can be reached at 913-748-4446 or [email protected]. APRIL 27, 2018 CCIM: KANSAS CITY’S REAL ESTATE DEALMAKERS C11

INTERACTIVE MAP The Kansas City Business Journal’s interactive development map Crane Watch is live. In a city that’s constantly reinventing itself, Crane Watch provides you the latest information on local construction and development projects – we update it continuously. You’re able to click on any point on the map to see a description of the project, who’s doing it, when it should be completed, how much it’ll cost and what it will look like. Projects feature a hyperlink taking you to a recent story KCBJ has written about the project. The tabs along the bottom allow you to view projects by category. Crane Watch is a vital tool for our readers, and one that will help you navigate the ever-changing face of the Kansas City area.

Q VIEW THE MAP NOW AT KansasCityBusinessJournal.com

For sponsorship opportunites, contact Ahmed Shalabi at [email protected] or 816-777-2206. 12 AN ADVERTISING SUPPLEMENT TO THE KANSAS CITY BUSINESS JOURNAL THE DEALMAKERS YOUR MOST VALUABLE PARTNER IN REAL ESTATE

CCIM Designees, Kansas City Chapter

Adam Abrams Bill Early Kelvin Heck Pat Murfey Dan Sight AREA REAL ESTATE ADVISORS, LLC JLL Heck Land Company Evergreen Real Estate Services Sight Commercial Realty

Henry Adamson Aaron Elyachar Doug Hedrick Paul Neal Ray Sisson Adamson & Associates, Inc. Elyachar Investments LLC Colliers International Grindstone Industrial Berkshire Hathaway

David Anderson Jon England Bruce Jackson Ferd Niemann Susan M. Smith AMAI Architecture NAI Heartland Bi-State Realty Advisors, LLC Christie Development Associates Susan M. Smith Advisory Services, LLC

Nathan Anderson Chris Erdley Richard RC Jensen David Noon James Stacy NAI Heartland Tower Properties Reece Commercial RealPac Stacy Company LLC

Bruce Baker Bob Fagan Bruce Johnson Joe Orscheln Adam Stein Baker Realty Advisors, Inc. CBRE, Inc. Block Real Estate Services, LLC CBRE, Inc. Berkshire Hathaway

Anita Bates Christina Fenwick John Jorden Russell Pearson Mark Talley Colliers International UMB Bank Jack Jorden Real Estate NAI Heartland NAI Heartland

Douglas Bates Mike Foster Ann Jorden-Spencer Phil Peck Wayne Thompson Grandbridge Real Estate Capital, LLC Foster & Associates, Inc. Jack Jorden Real Estate, LLC Block & Company, Inc. Realtors Thompson Design Consultants, P.C.

Ken Block Jef Franklin E. Gibson Kerr Nick Pickard Ellen Todd Block Real Estate Services, LLC J.W. Franklin Co. Cushman & Wakefeld Newmark Grubb Zimmer Curry Investment Company

Colleen Bradbury Tony Frook Whitney Kerr Drew Quinn Kevin Tubbesing Ferguson Properties Americo Life Inc. Cushman & Wakefeld Colliers International The Land Source/Evergreen Real Estate Services R. A. Bucky Brooks Don Gessen Whitney Kerr, Jr. Brent Roberts Copaken Brooks Block Real Estate Services, LLC Cushman & Wakefeld Block Real Estate Services Andrew Van Zante US Bank Bill Charcut Marty Gilchrist Michael Klamm Chris Robertson Orion Property Group Reece Commercial CBRE, Inc. Newmark Grubb Zimmer Michael VanBuskirk James Clark Larry Goldman Richard Lanning T David Rogers Newmark Grubb Zimmer Oxford Realty LLC Remax Commercial NT Realty RE/MAX Elite, REALTORS Sheryl Vickers Walt Clements Puneet Gorawara Matt Ledom Robert O. Schock Select Sites, LLC Dean Realty Co. KDR Group Block Real Estate Services Yarco Company, Inc. Brian Votava Charles Connely James Grifth William Bill Maas John Schorgl Northpoint Development Lewis White Real Estate Center Academy Bank Block & Company Inc Realtors Berkadia Todd Welhoelter Phil Craven Bob Gude Patrick Meraz Frank Sciara Commercial Property Advisors Academy Bank Northpoint Development Jones Lang LaSalle Americas, Inc. Grandbridge Real Estate Capital, LLC Janet Wilkerson Suzanne Dimmel Kent Guinn Aaron Mesmer Steve Shearer INVEST Commercial Real Estate Cushman & Wakefeld Block Real Estate Services, LLC The Shearer Real Estate Co. Christopher Williams Harry Drake Stephanie Harris Jayme Miller Bret Shefeld Highlands Development Group Block Real Estate Services, LLC KCB Bank NorthPoint Development VanTrust Real Estate, LLC

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