Kansas City, MO - Office Market Overview
The Kansas City Metropolitan Area includes the Briarcliff - Claymont, Red Bridge, and South Plaza - Countryside office space submarkets. With a metropolitan population of over 2 million people, Kansas City was originally founded as a port on the Missouri River and has since grown to be the largest city in Missouri. A wide variety of business and industry drive the Class A office space market in Kansas City, MO, including the agriculture and federal government sectors.
As of mid-2017, the Greater Kansas City office market encompasses nearly 26 million square feet of existing office space in properties larger than 50,000 square feet. The city is home to numerous corporate headquarters that contribute to the robust Kansas City commercial real estate market.
Kansas City, MO - Office Inventory Description
While agriculture has always played a major role in the economy of Kansas City, today white-collar employers such as the federal government, and banking & finance companies contribute to the demand for office space in Kansas City. With a gross metropolitan product of nearly $113 billion, the demand for space continues to be strong. Over 51% of the office space in Kansas City is Class A or A+, with another 48% of Class B product added to the total inventory in the market.
Some of the strongest demand for Class A office space in Kansas City is seen in the Crown Center - Union Hill office market. Located between the I-35 interstate and State Route 35, this submarket is home to investment-grade office buildings such as the Crown Center - Pershing Buildings, the 2323 Grand Blvd office building, and Two Pershing Square at 2300 Main Street.
Kansas City, MO Commercial Inventory Breakdown
Total: 35,884,312 SF
By square footage range:
- 50k to 100k SF: 5,246,588 SF / 14.62% of total office
- 100k to 500k SF: 20,043,977 SF / 55.86% of total office
- 500k to 1M SF: 6,768,747 SF / 18.86% of total office
- > 1M SF: 3,825,000 SF / 10.66% of total office
- Class A: 16,521,258 SF / 46.04% of total office
- Class B: 17,207,885 SF / 47.95% of total office
- Class C: 535,513 SF / 1.49% of total office
Kansas City, MO - Green Office Space
Over the years, both tenants and investors have realized the benefits of green office space, and Kansas City is certainly succeeding in meeting this demand. This year, Kansas City has ranked 27th of the top 30 office markets in the U.S. that were surveyed for the availability of energy-efficient office space. Over the past 12 years, the percentage of green office buildings in these major markets has increased by over 33%, according to the National Green Building Adoption Index published in 2017.
While LEED-certified office buildings in Kansas City account for just over 1% of the properties larger than 50,000 square feet, the number of Energy Star-rated buildings is over 3% and the percentage of green office buildings in Kansas City is just under 4%.
A great example of a Kansas City LEED-certified office building is One Petticoat Lane at 1010 Walnut Street. Located in the Downtown Kansas City commercial real estate submarket, this 141,000-square-foot building was completed in 1988 and has a LEED certification.
Kansas City, MO's Top Office-Using Sectors
With about 30,000 employees, the Federal Government is the largest employer in Kansas City, and, along with the healthcare and finance industries, maintains robust demand for Class A office space in Kansas City.
- Government – Federal, local and state government create many white-collar jobs, through agencies such as the Internal Revenue Service, the General Services Administration, and the Social Security Administration.
- Healthcare & Pharmaceuticals – Drug manufacturer Sanofi-Aventis, HCA Midwest Health System, Saint Luke's Health System, Children's Mercy Hospitals and Clinics, and the University of Kansas Hospital all help to drive the demand for Class A office space in the Kansas City metro area.
- Finance – Home to the Kansas City Federal Reserve Bank, white-collar office users also include American Century Investments, H&R Block, Novastar Financial, and Commerce Bancshares.
- Corporate Headquarters – Some of the numerous corporate headquarters in Kansas City include Andrews McMeel Universal, Applebee's, Hostess Brands, Kansas City Southern Railway, and Blue Cross and Blue Shield of Kansas City.
Kansas City Demographics
- Total Population476,974
- Male Population(48.7 %) 232,170
- Female Population(51.3 %) 244,804
- Median Age35.20
- Average Household Income$68,949
- Median Household Income$50,136
- Median Income Under 25$27,735
- Median Income 25-44$55,144
- Median Income 45-64$56,678
- Median Income Over 65$38,801
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