Kansas City’s industrial market enjoyed a boom year in 2014, with DTZ reporting that the region saw 926,000 square feet of net absorption during the fourth quarter of last year and 3.9 million square feet for the entire 12 months.
How good is that? As DTZ reports, during the last 10 years, only 2007 saw more industrial activity. That year, the Kansas City market absorbed 5.1 million square feet of industrial space.
In a bit of a twist, though, the industrial vacancy rate did rise last year, inching up to 7.8 percent at the end of 2014 from 7.4 percent at the end of 2013.
Blame this slight rise on new construction.
Michael Mayer, managing principal in DTZ’s Kansas City office, said that new construction in the industrial space expanded that market by 5.2 million square feet. Mayer said that three new buildings completed in 2014 accounted for most of this increase, all of them in Logistics Park Kansas City in Edgerton, Kansas. These buildings totaled 1.4 million square feet of new industrial space.
DTZ reported that the Johnson County submarket was a significant growth area last year. This submarket accounts for 28 percent of the metropolitan area’s industrial space, but has 44 percent — or 12.3 million square feet — of the bulk/modern space. Logistics Park Kansas City has two more buildings scheduled for completion in 2015.
The average industrial asking rent stood at $4.21 a square foot in the fourth quarter. That is up from $4.16 in the fourth quarter of 2013.