The words “retail apocalypse” generate plenty of dire press. But Lane4 Property Group says that there’s no doomsday scenario playing out in the Kansas City retail market.
Lane4 recently released its 2018 Kansas City Retail report. And the good news? Despite the struggles that brick-and-mortar retailers are suffering across the country, the Kansas City market saw more retail openings in 2018 than closings.
In this way, the Kansas City retail market mirrored the national scene. The physical retailers that are strong in the Kansas City area tend to be service-based or ones that offer experiences that shoppers can’t get online. Restaurants and entertainment offerings are especially strong here, Lane4 reports.
The Lane4 report also highlights a growing trend in the Kansas City market: A growing number of owners and developers are re-purposing existing retail space. Office users, walk-in urgent clinics and medical spas are more frequently moving into spaces that were once typically occupied by retailers.
Occupancy rates for the Kansas City retail market stayed fairly stagnant last year, according to Lane4. This isn’t surprising, as the most successful retailers today are working to boost online sales as opposed to opening more storefront locations.
Average retail lease rates, though, are on the rise throughout Kansas City. Lane4 reported that central Kansas City’s average lease rate jumped from a low $13.48 in 2016 to $24.03 last year. That 2017 average lease rate was the highest since this figure hit $25.34 in 2010.
The Central Kansas City market includes some of the most in-demand areas of the metro area, downtown, the Crossroads, Wesport and the Country Club Plaza area.
Overall average lease rates for the entire Kansas City market saw a more modest increase, jumping from $12.68 a square foot in 2016 to $14.11 a square foot last year. That’s a jump of 11 percent.
Occupancy rates for shopping centers in the Kansas City metropolitan area remained strong in 2017. Community centers in the Kansas City area had an occupancy rate of 91.9 percent in 2017, while lifestyle centers had an even stronger 96.7 percent occupancy rate. Power centers in the area had an occupancy rate of 94.2 percent in 2017, while strip centers had an average occupancy rate of 91 percent.
Neighborhood centers had the lowest average occupancy rate in the Kansas City metro area last year, at 89.9 percent, according to Lane4.