Vertical Cold Storage, sponsored by Platform Ventures, has opened its 311,000-square-foot multi-modal distribution facility in Kansas City, Mo. The center, which features 47,000 pallet positions, includes blast freezing technology and multiple rooms that can be converted from +35 degrees F to -20 degrees F.

Vertical Cold Storage broke ground on the facility in November 2023. At the time, it was the firm’s eighth such property. Innovative materials and systems were used in the building design and construction to reduce energy consumption. Primus Builders served as lead contractor.

READ ALSO: Top 10 Markets for Cold Storage Development

The facility is at 14820 Cleveland Ave., adjacent to the CPKC intermodal terminal in South Kansas City and within 30 miles of the BNSF, Union Pacific and Norfolk Southern terminals, giving it reach to and from anywhere in North America.

“Kansas City is a strategic hub … ideal for efficient distribution,” Mark Smid, CFO for Vertical Cold Storage, told Commercial Property Executive. “Its strong food and beverage production base and proximity to two-thirds of the U.S. population within a two-day drive made it the perfect choice for expanding our footprint.”

Vertical Cold Storage also has distribution centers in and around Chicago, Dallas, Indianapolis and Miami, among others. In July, the firm acquired its 10th cold storage facility, a warehouse in Dotham, Ala.

Appetite for cold storage

The vacancy rate for cold storage has significantly outperformed the overall broader industrial market since the inception of record keeping, according to Ed Halaburt, managing director at JLL Capital Markets.

He told CPE “This is likely due to a more constrained development pipeline within cold storage and the inelastic demand for food despite economic conditions.”

And the subsector is poised for growth, attracting investors, developers and financiers alike. “C-PACE financing, available in Missouri and on a near-national level, has become an increasingly popular construction and bridge financing tool across markets and asset classes, including cold storage, due to its flexible and cost-effective terms,” Francisco Crespo, director of originations with Nuveen Green Capital, told CPE.

“Nuveen Green Capital recently provided C-PACE financing for Class A cold storage projects, one in Philadelphia and another in Jacksonville, Fla.,” Crespo added. “By utilizing C-PACE, the sponsor was able to fill a gap in the project’s capital stack and obtain more leverage.”

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VanTrust has broken ground on the 526,119-square-foot Building C at the 2.4 million-square-foot Platte International Commerce Center development in Greater Kansas City, Mo. The speculative facility may be expanded to 1.1 million square feet, with delivery expected by July 2025. JLL will handle the marketing and leasing efforts.

Whiting Turner Contracting Co., together with Olsson Engineers and M+H Architects, provide design-build services for the development.

Platte International Commerce Center is a $185 million, three-to-four-building industrial project benefitting from a 16-year, payment-in-lieu-of-taxes Abatement Program.

READ ALSO: Kansas City Industrial Development Pipeline Balloons

Building C will feature four drive-in doors, 52 dock doors, 36-foot clear heights, 56- by 47-foot bay spacing, as well as a 135-foot truck court. Additionally, the parking arrangements are slated to include 405 auto and 61 trailer spaces.

VanTrust broke ground on the development’s first facility—Building B, which measures 748,833 square feet—in 2023 and completed it earlier this year. The 319,200-square-foot Building A was pad ready as of April and may take shape as either a build-to-suit or speculative facility.

Central Power Systems & Services fully leased Building B and, according to Business Facilities, pledged to invest more than $28.5 million to expand its manufacturing capabilities. The tenant specializes in the assembly of natural gas and diesel generators, among others.

Located at 4400 State Route 92 in Platte City, Mo., Building C will be less than 2 miles from Interstate 29 and 6 miles from the Kansas City International Airport, as well as roughly 26 miles northwest of downtown Kansas City, Mo.

JLL Managing Director Phillip Algrim and Senior Managing Director Kevin Wilkerson spearhead the leasing efforts for Building C. 

Greater Kansas City’s strong industrial demand

Metro Kansas City’s industrial pipeline encompassed 3.9 million square feet of space under construction as of September, according to a report by JLL. More than 85 percent of this pipeline was preleased, reflecting strong demand.

The market witnessed 2.7 million square feet of industrial space delivered during the first nine months of the year, the same source shows. Meanwhile, the industrial vacancy rate stood at 5.6 percent in September and remained flat throughout the year.

In September, BGO and Yukon Real Estate Partners broke ground on another industrial project in the metro. The 291,000-square-foot cold storage facility will open in the third quarter of next year.

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Patmos is expanding its Kansas City, Mo., presence with a second data center campus. The company is spending $1 billion to repurpose a vacant printing plant, formerly used by Kansas City Star, into a 100-megawatt facility.

The data center and cloud provider will oversee each development phase in-house and expects to have the first 5 megawatts online next month. Over a period of 18 months, the firm plans to have 40 megawatts ready.

Patmos’ new facility at 1601 McGee St. will have liquid and immersion cooling systems, along with rear-door heat exchangers.

The property is roughly 1 mile away from the company’s first Kansas City data center, a 4-megawatt facility at 1325 Tracy Ave. Patmos also has data centers in Dallas and Phoenix.

READ ALSO: How AI Is Pushing Cloud Data Center Providers to Scale Up

Ambassador Hospitality LLC owns the building, having picked it up in 2019 for $30.1 million, according to CommercialEdge data. Initially, Kansas City Star had plans to lease back the property for another 15 years, but it moved out in 2022, and the asset remained vacant until Patmos signed the agreement to occupy it, Kansas City Business Journal reported.

Midwest data center sector grows

Kansas City is one of the fastest-growing tech hubs in the U.S. The metro’s low natural disaster risk together with its affordable green energy and robust fiber optic infrastructure contribute to its increased popularity among developers, which in turn helps grow data center talent in the region.

On a larger scale, the Midwest is attracting more and more investment from the data center sector. Last month, Vantage Data Centers begun work on a $2 billion development, in Columbus, Ohio—its first project in the region.

In Chicago, one of the primary data center markets, CyrusOne started construction on its second data center campus. Plans call for two buildings, encompassing 446,000 square feet, which will deliver an initial 40 megawatts.

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Fidelis Realty Partners LLC has purchased Adam’s Dairy Landing, a 280,000-square-foot retail center in Blue Springs, Mo., in the Kansas City metro area. JLL Capital Markets represented seller Albanese Cormier Holdings LLC, also sourcing acquisition financing through MetLife Investment Management. The property traded for $39.8 million and the acquisition loan totaled $27.9 million, CommercialEdge shows. The property last traded in 2021, for $32 million.  

Adam’s Dairy Landing is a regional open-air retail center developed between 2009 and 2012, covering 36 acres. The eight-building property has a diverse tenant roster, including Bath&Body Works, Michaels, Barnes&Noble, Old Navy, HomeGoods, Ross Dress for Less, TJ Maxx and Five Guys. The property is currently 98 percent leased. Shadow anchors include Target, a Walmart Supercenter and a Home Depot.  

A Kansas City retail center just off Interstate 70

The shopping center is at 880 NE Coronado Drive, just off Interstate 70 and Adam’s Dairy Parkway. Other major thoroughfares in the area include Highway 40 W and NW Highway 7. Downtown Kansas City is some 20 miles west.  

The JLL Capital Markets investment and sales advisory team brokering the deal included Senior Director Michael Nieder, as well as Managing Directors Chris Gerard and Keely Polczynski. Additionally, the company’s debt advisory team was led by Senior Managing Director Colby Mueck, as well as Managing Director Chris Knight and Director Michael King. 

Just last week, a JLL Capital Markets team brokered a similar transaction, but in the Houston area. Longpoint Realty Partners bought Mason Village Shopping Center, a 96,486-square-foot asset in Katy, Texas.

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The Kansas City industrial market has a robust and adaptable character, benefitting from its central location and extensive infrastructure. The metro’s under-construction pipeline nearly doubled year-over-year through September, Kansas City being one of the most active markets for industrial development.

As of September, the metro demonstrated its strength by leading the Midwest for pipeline size, with 10.7 million square feet of industrial space underway across 14 properties. Additionally, it posted some of the lowest sale prices among U.S. industrial markets, highlighting its competitive edge.

Below, we’ve compiled CommercialEdge data for an overview of the metro’s industrial performance.

Kansas City industrial development forges ahead

At the end of September, Kansas City had 10.7 million square feet in its industrial supply pipeline across 14 properties. By comparison, at that same point last year nearly 6 million square feet of industrial space were underway in the market.

Among peer markets, the Inland Empire (10.3 million) and Atlanta (9.4 million) recorded fairly similar numbers, while Phoenix (32.6 million) and Dallas (17.0 million) took the lead. Kansas City’s September 2024 pipeline accounted for 3.7 percent of existing stock—above the national average of 1.8 percent and leading the Midwest for development on a percentage-of-stock basis.

Year-to-date through September, approximately 2.7 million square feet of industrial space broke ground in Kansas City across eight properties, representing 0.9 percent of the total stock. The index was slightly higher than the national average of 0.8 percent.

Notable projects currently underway include Heartland Coca-Cola Bottling Co.’s first phase of a 1.2 million-square-foot industrial development in Olathe, Kan. The initial 600,000-square-foot stage will encompass roughly 312,000 square feet of production, equipment and recycling space, 287,000 square feet of warehousing accommodations and 14,000 square feet of office space, as well as other accessory structures.

Another project that recently broke ground is a 291,000-square-foot cold storage facility in New Century, Kan. BGO and Yukon Real Estate Partners are developing the warehouse to be solar-ready and target LEED certification. As part of its sustainability commitments, it will include clean and efficient energy usage. 

Deliveries reduced by half year-over-year

Year-to-date through September, 3.9 million square feet of industrial space came online in Kansas City. Deliveries accounted for 1.3 percent of the market’s total stock, slightly higher than the 1.1 percent national average. The metro’s industrial delivery volume fell to almost half its year-ago size, when 8.1 million square feet entered the market.

Indianapolis (6.1 million square feet), Atlanta (7 million square feet) and New Jersey (7.1 million square feet) recorded better deliveries, but still lagged behind Dallas (25.3 million square feet) and Phoenix (23.5 million square feet).

In June, VanTrust Real Estate completed construction on Building B2, a 330,000-square-foot industrial facility within New Century Commerce Center, a 535-acre campus in New Century, Kan.

Flint Development recently completed Building C at Flint Commerce Center, a 370-acre industrial park in De Soto, Kan. The 1 million-square-foot facility represents the project’s first phase.

The $390 million Flint Commerce Center is being developed in multiple phases and will encompass six buildings, ranging from 300,000 to 1.3 million square feet.

Kansas City industrial sale prices low

Industrial sales totaled $54.3 million year-to-date through September in the metro, with properties trading at an average of $36.18 per square foot, according to CommercialEdge data. Almost 2 million square feet spread across 21 properties changed hands.

Kansas City posted one of the lowest average sale prices among the top U.S. industrial markets. Prices in the Inland Empire ($266 per square foot) and New Jersey ($227 per square foot) were much higher than the $131 national average.

Vacancy lower than the national average

Kansas City’s industrial vacancy rate at the end of September clocked in at 5.2 percent, below the national average of 7 percent and above the 3.7 percent registered at that same point in 2023, as CommercialEdge data shows.

Other markets with vacancy rates higher than the national average were New Jersey (8.6 percent), Indianapolis (8.3 percent), Dallas (7.5 percent) and the Inland Empire (7.3 percent).

Despite new deliveries, Detroit led the Midwest markets with the lowest vacancy rate at 4.6 percent, outperforming Kansas City for the first time in months, according to CommercialEdge.

One of the more significant leases was CJ Logistics America’s commitment to the upcoming 291,000-square-foot cold storage facility in New Century mentioned above, with most of the space dedicated to global food company Flora Food Group. Completion is expected by the third quarter of 2025.

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BGO and Yukon Real Estate Partners have broken ground on a 291,000-square-foot cold storage facility outside of Kansas City, Mo.

CJ Logistics America will lease the upcoming property, with most of the space dedicated to global food company Flora Food Group. The warehouse is expected to open in the third quarter of 2025.

The facility is being developed adjacent to Flora Good Group’s plant, which produces brands such as Country Crock, I Can’t Believe It’s Not Butter and Violife.

YREP Director of Development Axel Anderson stated, in prepared remarks, that the buildings will be connected by an above-ground conveyer bridge to allow finished products to be delivered directly into the warehouse for cold storage, which will increase operational efficiencies for both the food company and CJ Logistics America.

READ ALSO: Why Cold Storage Is Getting Hotter

The warehouse will also be solar-ready and will target LEED certification as part of its sustainability commitments, including clean and efficient energy usage. The facility will also feature Alta EXPERT refrigeration systems.

Located in New Century, Kan., some 30 miles from Kansas City, the site will have a direct connection to the BNSF Railway, the largest freight railroad in the U.S., with a rail spur into the warehouse. The new facility will be less than 4 miles away from Interstate 35. Location-wise, approximately 85 percent of the U.S. will be reachable within two days either by highway, rail or air.

CJ Logistics growth

CJ Logistics, which operates 280 bases in 40 countries around the world, has been expanding its footprint across the U.S. and North America.

In June 2023, CJ Logistics America teamed up with Korean Ocean Business Corp., a South Korean government entity, in a public-private partnership to develop three large-scale logistics centers across the U.S, totaling 3.9 million square feet.

The plan called for CJ Logistics to contribute land for the projects and subsequently to operate them, while KOBC would provide the funding. The facilities will be used to handle import and export cargo of global and South Korean companies.

CJ Logistics America also occupies a 1.1 million-square-foot cross-dock facility in Wilmer, Texas, which is part of Logistics Property Co.’s 252-acre campus. The company also leases a 1 million-square-foot distribution facility in Channahon, Ill.

Previous BGO deals

In August, BGO and RL Cold, a division of RealtyLink LLC, broke ground on a 215,766-square-foot speculative cold storage warehouse in Mount Laurel, N.J. The building is slated for completion in the second half of 2025. Located on a 12-acre site, the property is taking shape just off Interstate 295 and about 13 miles from downtown Philadelphia.

Last December, Saxum Real Estate and equity capital partner BGO completed the recapitalization of an approximately 1.5 million-square-foot, six-property cold storage portfolio. The collection is located in major U.S. distribution hubs, including Phoenix, Atlanta and Dallas-Fort Worth as well as Hazleton, Pa., and Reno, Nev.

A seventh facility in Atlanta was also recapitalized at a later date, bringing the portfolio to about 1.7 million square feet. Arcadia Cold Storage & Logistics, a leading cold storage operator, occupies nearly 81 percent of the entire properties.

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Developed between 2014 and 2017, the buildings are located within the 1,700-acre master-planned industrial park and inland port developed jointly by NorthPoint Development and BNSF Railway. The properties offer immediate access to BNSF Railway’s state-of-the-art intermodal rail facility. Located along the railway’s Transcontinental Corridor, LPKC opened in 2013. It has a total building capacity of 17 million square feet.

In 2017, NorthPoint sold a majority stake in the portfolio to Ares Management Real Estate, a global alternative investment manager with nearly $50 billion in assets under management as of March. NorthPoint retained a minority stake as part of the joint venture and also continued to operate and maintain the buildings.

The portfolio is currently 93 percent leased to a variety of premier tenants including Amazon, Stanley Black & Decker, Sam’s Club, Assa Abloy and Smart Warehousing. The buildings feature concrete tilt-panel construction with an average 35-foot clear height and 706 dock doors.

Amazon agreed to lease an 822,104-square-foot building at LPKC in March 2016 for a fulfillment center expected to create about 1,000 jobs. At the time, it was the largest speculative industrial building ever constructed in the Kansas City, Mo., market.

Barings Transactions

Steve Murray, a Barings managing director, said in a prepared statement the refinancing transaction is closely aligned with the asset management firm’s real estate debt strategy that is focused on investing in high-quality assets in dynamic markets and backed by experienced sponsors. The company’s real estate debt platform is now more than $28.4 billion.

Also this month, Barings provided a $102 million five-year construction loan alongside $63.3 million in green financing from Counterpointe Sustainable Real Estate to help redevelop downtown Darien, Conn.’s Corbin District. Phase II will feature 11 new buildings including a mix of apartments along with office and retail space.

Last year, Barings purchased Warner Commerce Center, a newly built speculative 197,000-square-foot industrial property in Tempe, Ariz., from The Opus Group for $42.4 million.

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Americold, in partnership with Canadian Pacific Kansas City, plans to invest $127 million in a 335,000-square-foot cold storage facility in Kansas City, Mo. While the company intends to begin construction in the first half of 2024, the start of the project is still pending local approvals.

This new facility is slated to support CPKC’s Mexico Midwest Express service that connects midwestern U.S. markets with Mexico.

READ ALSO: How Reshoring Is Driving Industrial Real Estate Demand

Project partners include the City of Kansas City, the Economic Development Corporation of Kansas City, KC SmartPort, the Missouri Department of Economic Development, Missouri One Start, Evergy and Spire, together with the Missouri Partnership.

The Kansas City facility will be the first of many to be built on a CPKC railway as part of the firms’ strategic collaboration that was announced in June. Under the terms of the agreement, Americold will co-locate many of its warehouses along the railroad’s network.

Expanding beyond the Americas

Americold, a REIT focused on temperature-controlled warehouses, has an extensive portfolio of cold-storage facilities across the world. Overall, the company owns or operates 243 properties totaling approximately 1.5 billion refrigerated cubic feet. While the majority of Americold’s warehouses are in the U.S., the company also has locations in Europe, Asia-Pacific and South America.

The collaboration with CPKC will add several new facilities to Americold’s U.S. development pipeline, but the REIT already saw a major expansion in January 2021, when it acquired Agro Merchants Group for more than $1.7 billion. The purchase added 46 facilities totaling 236 million cubic feet to its portfolio.

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The joint venture between Lormax Stern and Time Equities Inc. has purchased Oak Park Commons, a 348,983-square-foot shopping center in Lenexa, Kan. The previous owner was DRA Advisors, according to CommercialEdge data. Mid-America Real Estate Corp. Principal Ben Wineman and The R.H. Johnson Co. Principal Eric Gonsher represented the seller.

DRA Advisors has recently sold a 172,697-square-foot retail center in Darien, Ill., also with the assistance of Mid-America. Principals Rick Drogosz, Ben Wineman and Joe Girardi were instrumental in the deal.

Completed in 1987, Oak Park Commons comprises six buildings on a 12.8-acre site. Its tenant roster includes regional and national retailers such as Ross Dress for Less, Hobby Lobby, Ulta, Verizon, Planet Fitness, Dollar Tree, Best Buy, Petco, K&G Fashion Superstore, Sam’s Club, Northern Tool + Equipment, Shoe Carnival, Chipotle, Panda Express and Aspen Dental.

Located at 12120 W. 95th St., Oak Park Commons is close to Interstate 35, which provides direct access to downtown Kansas City, and directly across Oak Park Mall. The Johnson County property serves around 241,000 individuals within a 5-mile radius, with the average household income of $116,000.

Kansas City’s retail sector has shown resilience during 2023. According to a recent Marcus & Millichap report, Johnson County remained one of the top submarkets for transactions, alongside East Jackson County and the North of the River area.

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More than a third of the building is preleased. Image courtesy of VanTrust Real Estate

VanTrust Real Estate has commenced construction on Building B2, a 330,000-square-foot industrial project within New Century Commerce Center, a 535-acre campus in New Century, Kan. Some 130,000 square feet of the building are already preleased. This will be the third facility within the park and CBRE is the exclusive leasing agent.

New Century Commerce Center is an industrial project being developed in phases. Phase I is designed to accommodate up to 1.5 million square feet and has the 330,000-square-foot Building A already sold to Cnano Technology USA and the 752,000-square-foot Building B1 recently reaching completion and being available for lease. The already-planned two phases are set to provide 3.6 million square feet, with the industrial campus expected to eventually total approximately 7.1 million square feet.

Located between New Century Air Center and John Glenn Parkway, New Century Commerce Center is close to Interstate 35 and 27 miles from Kansas City. Additionally, the industrial campus will provide easy access to the area’s major transportation hubs and a deep workforce pool. CBRE’s team of Senior Vice Presidents Michael Mitchelson and Austin Baier are marketing the development for lease.

Recent industrial activity in the Kansas City area

Multiple developers announced industrial projects in the Kansas City area this year. In June, Block Real Estate Services received city approval for a 3.7 million-square-foot campus. Tiffany Springs Logistics Center’s first phase will consist of 1.9 million square feet, with construction expected to begin in 2024.

The metro had some 10.2 million square feet of industrial space under construction as of October, according to a recent CommercialEdge report. One of the more recent additions to the pipeline is Vertical Cold Storage’s multi-modal distribution center marking the company’s eighth such facility.

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The new multi-modal distribution center will be delivered by the end of 2024. Image courtesy of Vertical Cold Storage

Vertical Cold Storage, sponsored by Platform Ventures, has broken ground on a multi-modal distribution center in Kansas City, Mo. The 300,000-square-foot facility is scheduled to start operations by the end of 2024 and will be the developer’s eighth such property. Primus Builders is the general contractor.

The upcoming facility is set to include blast freezing, case picking and expedited intermodal transportation services. It will also include approximately 50,000 pallet positions, four rooms convertible to -20° F, while its design and construction will be focused on reducing energy consumption. The general contractor expects to employ 150 workers for the project.

The development site is adjacent to the CPCK Intermodal Terminal and within 30 miles of BNSF Railway, Union Pacific Intermodal Terminal and Norfolk Southern Terminal.

Kansas City’s growing industrial pipeline

Multiple industrial projects have been announced in the Greater Kansas City area since the start of the year, with some of the largest including Cnano Technology USA’s plans for a 333,365-square-foot manufacturing facility at New Century Commerce Center, in Kansas City. The China-based electric vehicle components manufacturer is investing $94.7 million in the project, set to become its North American headquarters.

In June, Block Real Estate Services received city approvals for Tiffany Springs Logistics Center, a 3.7 million-square-foot project in the same area. The first phase of the $365 million investment, consisting of 1.9 million square feet, could start in 2024.

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Panasonic’s battery plant in De Soto, Kan. The Japanese conglomerate leased space at Flint Commerce Center, one mile away from its upcoming manufacturing facility. Image courtesy of Panasonic

Panasonic Energy Co. has signed a lease at Flint Commerce Center in De Soto, Kan., to occupy 509,760 square feet, the Kansas City Business Journal reported. Developed by Flint Development, the 370-acre industrial park is currently underway, with completion anticipated for next summer.

In the past two years, the city granted several authorizations for the project. In late 2021, the De Soto City Council approved a memorandum of understanding for the development, which was set to encompass roughly 3.5 million square feet. A couple of months later, Flint Development requested $100 million in industrial revenue bonds to build a 1 million-square-foot facility at the industrial complex. By mid-2022, the project, now upgraded to comprise 4.7 million square feet, was finally approved in its entirety.

READ ALSO: Industrial Sector Continues Growth Amid Rising Rates

Valued at $390 million, Flint Commerce Center is being developed in multiple phases and will encompass six buildings, ranging from 300,000 to 1.3 million square feet. The first phase of the development is set to include the 1 million-square-foot Building C where Panasonic will occupy half of the space. Eudora Times reported that the facility will feature 50 dock doors, 254 car parking spaces and 251 trailer parking stalls. The development team includes Contegra Construction and Davidson Architecture and Engineering.

President & CEO Mark Long, Executive Managing Director John Hassler and Managing Director Scott Bluhm with Newmark Zimmer represented Flint Development in the lease transaction.

Industrial development in Greater Kansas City is booming

Flint Commerce Center is taking shape at the corner of 103rd St. and Edgerton Road, 30 miles from Kansas City, Mo. The industrial complex will be a mile away from Panasonic’s $4 billion battery plant, which is currently being developed at the Astra Enterprise Park by Turner Construction Co. and Yates Construction.

Greater Kansas City has several large industrial projects currently underway. Block Real Estate Services received city approvals for Tiffany Springs Logistics Park, a 3.7 million-square-foot project in Kansas City, while Hunt Midwest broke ground on KCI 29 Logistics Park, a 3,300-acre industrial campus slated for completion by mid-2025. Additionally, Cnano Technology USA is establishing its North American headquarters in New Century, Kan., at New Century Commerce Center, an 850-acre center developed through a public-private partnership with Johnson County Government, the Johnson County Airport Commission and master developer VanTrust Real Estate.

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Cnano Technology USA is establishing its North American HQ at New Century Commerce Center in New Century, Kan. Image courtesy of VanTrust Real Estate

Cnano Technology USA, an international manufacturer of electric vehicle components, is investing $94.7 million in a new 333,365-square-foot facility at New Century Commerce Center in the Kansas City area that will become the China-based company’s North American headquarters.

Cnano will own and occupy the manufacturing facility to create liquid conductive paste, a component used for a variety of electronic applications, including batteries for electric vehicles, cell phones and power tools. Shawn Montgomery, president of Cnano Technology USA, said in a prepared statement the plant will manufacture conductive and structural additive products for the lithium-ion battery, rubber and polymer, and composite markets.

READ ALSO: Nearshoring Is Boosting Supply Chain Resilience

The facility, which is expected to create more than 100 jobs with a payroll of about $7.1 million, will be located in a Class A spec building on nearly 20 acres in the multimodal industrial center in New Century, Kan. Situated in the southwest area of the Kansas City region, the center offers direct access to air, rail and interstate highways, including I-35.

The 850-acre center is being developed through a public-private partnership with Johnson County Government, the Johnson County Airport Commission and master developer VanTrust Real Estate. CBRE is marketing the property. Newmark Zimmer represented Cnano in its site search. The announcement was made by the Kansas City Area Development Council, an economic development nonprofit serving the 18-county, two-state Kansas City area.

The Cnano facility is one of two speculative buildings being developed by VanTrust Real Estate in the center’s first phase. When fully developed, the center will have more than 7 million square feet of industrial space. The first two buildings, totaling nearly 1.1 million square feet, were initially scheduled to be completed by the second quarter of this year. The second spec building will be a cross-dock facility with 752,400 square feet on 50 acres. However, Van Trust told the Johnson County Airport Commission earlier this year that it will take an additional six to 12 months to prepare the smaller building for Cnano, according to the Kansas City Business Journal.

VanTrust received a $19.7 million loan from Commerce Bank of Kansas City, Mo., in August 2022 that is set to mature on Aug. 25, 2025, according to CommercialEdge data. The property is subject to a 50-year unsubordinated net ground lease held by Johnson County expiring in June 2073, CommercialEdge reported.

Growing hub

The Kansas City region continues to see industrial growth, particularly in the area of electric vehicle development. In July 2022, Panasonic Energy announced plans to build a $4 billion EV battery manufacturing facility in De Soto, Kan. One of the largest economic developments in Kansas history, the project is expected to create as many as 4,000 new jobs and have ripple effects throughout the region and state by supporting about 16,500 construction jobs and an estimated 4,000 additional jobs for suppliers and local businesses.

A leading logistics hub and key location for manufacturing, distribution and e-commerce, the Kansas City region has delivered 70 million square feet of industrial development in the last 10 years and employs more than 190,000 people. From Kansas City, 85 percent of the U.S. population can be reached in two days or less.

In January, Urban Outfitters Inc., a global lifestyle and retail company, said it was investing $60 million in a new 604,000-square-foot fulfillment center for its clothing rental brand, Nuuly, at the Raymore Commerce Center in Raymore, Mo. Located off I-49, the property was also developed by VanTrust Real Estate.

In late June, Block Real Estate Services received municipal approvals to develop Tiffany Springs Logistics Park, a $365 million, 3.7 million-square-foot industrial project in Kansas City, Mo. The campus will be built in three phases with the first 1.9 million-square-foot segment starting as soon as 2024, with completion estimated by 2029.

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KCI 29 Logistics Park groundbreaking. Image courtesy of Hunt Midwest

Ace Hardware Corp. will be one of the first tenants at KCI 29 Logistics Park, a 3,300-acre industrial campus being developed by Hunt Midwest in Kansas City, Mo. Construction on the hardware company’s Retail Support Center is expected to start soon, with completion anticipated in mid-2025 and a fully operational status in the same year.

The Retail Support Center is set to total 1.5 million square feet, nearly double the size of the company’s average facility. Ace Hardware is planning to use the distribution center to enhance the company’s inventory capacity and improve service across the U.S., while also meeting the needs of its growing retail landscape. In the past five years, the firm has opened 850 new stores across the country.

The building is expected to feature the latest technology, automation and warehouse management systems. The Ace Hardware development will create an estimated 100 construction jobs and employ more than 350 people when completed.

First facility of new logistics park

Ace Hardware’s distribution hub will be the first facility in Hunt Midwest’s new KCI 29 Logistics Park. The Kansas City-based developer recently broke ground on the project after announcing it a year ago.

KCI 29 Logistics Park has the potential for up to 20 million square feet of industrial space and will include improvements to the interchange at Interstate 29 and Mexico City Avenue. The new industrial park will have direct access to the new Kansas City International Airport terminal and KCI Air Cargo Hub, as well as to interstates 29 and 435. The location would allow tenants to reach 90 percent of the continental U.S. within two days via ground shipping and overnight via air freight.

Hunt Midwest is currently working on the first phase of infrastructure improvements at the upcoming campus, with completion expected this fall. KCI 29 Logistics Park will include build-to-suit, land sale or building lease opportunities, and has already seen strong interest from major national and international companies looking for manufacturing, distribution or logistics space.

Outside Missouri, Hunt Midwest is also working on a two million-square-foot industrial complex in Anderson, S.C., as well as its new headquarters building in suburban Chicago.

The post Hunt Finds an Ace for KC Mega-Project appeared first on Commercial Property Executive.

Image by Lorenzo Cafaro via Pixabay.com

Block Real Estate Services has received municipal plan, rezoning and incentive approvals for its Tiffany Springs Logistics Park, a $365 million, 3.7 million-square-foot industrial project in Kansas City, Mo.

The campus will come online in three phases on approximately 281 acres; the site is located west of Interstate 29 in The Northland, northeast of Tiffany Springs Road and Amity Avenue. At full build-out, the property will comprise seven buildings ranging from 423,033 to 754,792 square feet.

READ ALSO: Top 5 Markets for Industrial Construction in the South

Pending approval by the Port Kansas City agency this fall, construction on the park’s 1.9 million-square-foot first phase could start in 2024, with completion estimated in 2029. Depending on market demand, the entire campus could be delivered by 2036. Finkle + Williams Architecture is the project architect, while McClure Engineering will serve as civil engineer.

Block did not reply to Commercial Property Executive’s request for information.

The company’s existing properties in the Kansas City metro include the 117-acre Lenexa Logistics Centre in Lenexa, Kan., the 80-acre K-7 Logistics Centre in Shawnee, Kan., and the 223-acre 175th Commerce Centre in Olathe, Kan., among others.

Plenty active

Tiffany Springs is one of several projects that are planned or underway in The Northland, driven in part by the recent opening of Kansas City International Airport’s new $1.5 billion terminal.

In March 2022, for example, tech powerhouse Meta started work on its first data center in Kansas City, an $800 million hyperscale facility within Diode Ventures’ 5.5 million-square-foot Golden Plains Technology Park. Completion is expected in 2024.

Other submarkets of the metro are active, too. In March of this year, ARCO National Construction and Block Real Estate Services completed a 200,000-square-foot distribution center at Lenexa Logistics Centre in Lenexa, Kan. The building is owned by MS International, a provider of flooring and hardscaping products.

Kansas City’s industrial demand has been steady enough to spur ongoing leasing and construction, especially in Johnson County, though investment sales have suffered because of increased interest rates, according to a first-quarter report from JLL.

Still, over the rest of the year, the metro will see more than 13 million square feet of demand versus more than 10 million square feet of deliveries, the report estimates. Meanwhile, overall vacancy was 3.9 percent at the end of March and trending downward.

The post 3.7 MSF Industrial Project Moves Forward appeared first on Commercial Property Executive.

10757 Mill Creek Road. Image courtesy of ARCO National Construction

ARCO National Construction and Block Real Estate Services have completed a 200,000-square-foot facility situated at the Lenexa Logistics Centre in Lenexa, Kan. The distribution center is owned by MS International, a provider of flooring and hardscaping products.

The Lenexa Logistics Centre is a Class A, 117-acre industrial project encompassing 3.2 million square feet. Construction on the project commenced in 2013, with its first phase consisting of six buildings totaling roughly 1 million square feet. A second phase added four building to the site.

New industrial facility in Kansas City area

Located at 10757 Mill Creek Road, the building features 32-foot clear heights, two drive-in ramps, 13 dock positions and can accommodate multiple interior bridge cranes. Additionally, the property includes up to 190,000 square feet of storage space, an office component, product showroom capabilities and 132 parking spots, according to CommercialEdge. This is the ninth project delivered by the joint venture within the industrial campus.

Sitting on a 17-acre lot, the facility is close to an Amazon Delivery Station and to interstates 35 and 435, allowing for travel to Wichita, Kan., and St. Louis. The project is 18 miles from downtown Kansas City, Mo., and 34 miles from Kansas City International Airport.

Earlier in 2023, another industrial project was announced in the area. Urban Outfitters Inc. is constructing a 604,000-square-foot fulfillment center at the Raymore Commerce Center in Raymore, Mo. The company will invest $60 million in the project, which is expected to bring 750 new jobs over the next five years. In December 2022, a 1.2 million-square-foot industrial facility for Heartland Coca-Cola Bottling Co.’s new factory gained approval. That project, located in Olathe, Kan., is expected to be completed in 2024.

The post ARCO, Block Complete Kansas City-Area Distribution Center appeared first on Commercial Property Executive.

11500 Granada St., Leawood, Kan.

Montecito Medical has acquired a portfolio of six medical office buildings in Greater Kansas City, Kan., in a sale-leaseback transaction. Discover Vision Centers sold the assets totaling 95,769 square feet and will remain their anchor tenant. ERE Healthcare Real Estate Advisors CEO & Managing Director Collin Hart and Director Marc Flynn represented the seller.

With this deal, Montecito expanded its Kansas City-area portfolio that also includes medical office buildings in Lee’s Summit, Mo., and Harrisonville, Mo.

The Discover Vision facilities have an average size of roughly 20,000 square feet and can be found at the following locations:

• 11010 Haskell Ave., Kansas City, Kan.
• 15710 W. 135th St., Olathe, Kan.
• 11500 Granada St., Leawood, Kan.
• 4741 S. Cochise Drive, Independence, Mo.
• 1018 W. Foxwood Dr., Raymore, Mo.
• 211 NW Highway 7, Blue Springs, Mo.

The laser vision correction centers provide a full range of medical services, including routine eye care, laser vision correction, diabetic eye care, advanced cataract surgery and retinal surgery.

Montecito’s health-care portfolio

Since 2006, Montecito Medical has acquired medical office properties in 35 states across the U.S., valued at more than $5.1 billion.

Last year in August, Montecito expanded its Florida footprint with the acquisition of a 37,000-square-foot medical office building in Lithia. Rubin Real Estate Advisors sold the asset for $20 million.

A more recent transaction closed early this year, when the company sold a 13-property portfolio to a partnership between Remedy Medical Properties and Kayne Anderson Real Estate. The assets, located in eight states, traded for $131 million.

The post Montecito Medical Grows Kansas City Footprint appeared first on Commercial Property Executive.

Raymore Commerce Center in Raymore, Mo. Image courtesy of Jacia Phillips|Arch Photo KC

Urban Outfitters Inc. (URBN), a global lifestyle and retail company, plans to invest $60 million in a new 604,000-square-foot fulfillment center for its clothing rental brand, Nuuly, at the Raymore Commerce Center in Raymore, Mo. The company expects to create 750 jobs at the site in the Kansas City industrial market within five years.

Pending completion of all state and local approvals and agreements, the company plans to locate its fulfillment and laundry center at the property, which was developed by VanTrust Real Estate and marketed by Colliers. Located off Interstate 49, the industrial park has three buildings, and the 130-acre site can accommodate nearly 2 million square feet of space. The Kansas City, Mo.,-based developer broke ground on the first 565,000-square-foot building in September 2020.

READ ALSO: Retail Property Redevelopment Strategies

The planned facility will be Nuuly’s second fulfillment center in the U.S. and will support the brand’s next phase of growth, according to Dave Hayne, chief technology officer of URBN & president of Nuuly.

URBN is a leading lifestyle products and services company featuring global consumer brands such as Anthropologie, BHLDN, Free People, FP Movement and Urban Outfitters. Nuuly is a subscription rental clothing service for women and a retail marketplace that offers thousands of styles from URBN brands and designers. People can also buy or sell secondhand through Nuuly Thrift on the brand’s website. Hayne said in a prepared statement Nuuly has experienced significant growth since it was launched in 2019.

Kansas City industrial market growth

The Nuuly facility represents URBN’s growing presence in the market. The company announced plans in 2020 to establish a $403 million, 1.5 million-square-foot omni-channel fulfillment center in Kansas City, Kan., which was complete in October 2022.

Gov. Mike Parson said in prepared remarks Missouri is a strategic choice for companies like Nuuly that are searching for a location in the middle of America for their expansion projects.

Chris Gutierrez, president of KC SmartPort, an affiliate of the Kansas City Area Development Council, said in a prepared statement global supply chain demand continues to increase and the Kansas City region’s central location, robust infrastructure and access to skilled workers continues to attract leading brands like URBN.

The KCADC serves the 18-county, two-state Kansas City area as an economic development nonprofit and has helped attract more than 60,000 jobs to the region. The Kansas City region is a leading North American logistics hub and key location for distribution and e-commerce with access to rail, air, water and road transportation. About 85 percent of the U.S. population can be reached from Kansas City in two days or less.

The post URBN Picks Kansas City for $60M Fulfillment Center appeared first on Commercial Property Executive.

Image by Paul Brennan via Pixabay

The R.H. Johnson Co. has purchased Merriam Town Center, a 363,076-square-foot regional power center in the Kansas City suburb of Merriam, Kan. The seller was SITE Centers, according to CommercialEdge data, which had acquired the asset back in 2013 from Blackstone for some $49 million.

A JLL Capital Markets team led by Director Michael Nieder and Managing Director Amy Sands represented the seller in the current transaction.

Completed in 1998, the open-air shopping destination encompasses eight buildings across a 46.7-acre site. Tenants at Merriam Town Center include PetSmart, Ross Dress for Less, Home Depot, Cinemark and Dick’s Sporting Goods. At the time of the sale, the center was 97 percent leased.

Merriam Town Center is located at 8800 Johnson Drive, roughly 10 miles southwest of downtown Kansas City. The property is right off Interstate 35, in an area where the daily traffic count reaches approximately 128,000 vehicles. The average household income within a five-mile radius is $92,500.

SITE Centers has recently sold Ashbridge Square, a 386,248-square-foot power center in Downingtown, Pa. Institutional Property Advisors represented the seller and procured the buyer, a joint venture between Kahn Development Corp. and J. Loew & Associates.

The post SITE Centers Sells Kansas City Retail Asset appeared first on Commercial Property Executive.

Heartland Coca-Cola site. Image via Google Street View

Heartland Coca-Cola Bottling Co. has gotten one step closer to realizing its new production campus in Olathe, Kan., with a recent thumbs-up from the Olathe Planning Commission. In a unanimous vote, the five-member body approved a revised preliminary site development plan for the approximately 1.2 million-square-foot industrial project roughly 25 miles southwest of Kansas City.

Heartland closed on the acquisition of the 116-acre development site in September 2022. The future production, warehouse and office complex will come online only 13 miles from the company’s headquarters in Lenexa, Kan.

READ ALSO: Trends That Will Shape Industrial Real Estate in 2023

Heartland’s selection of the Olathe property was purely a real estate decision. “When we looked at the potential for this project, we looked in St. Louis, where we have a large facility, we looked in Lenexa and we also looked around the entire Kansas City metro area and we just could not find the amount of land that we would need to build a brand-new facility until we looked into Olathe,” Edward Bryant, a vice president with Heartland Coca-Cola Bottling Co., told Commercial Property Executive.

The planning commission green-lighted Heartland’s updated vision for the production campus. The secure facility will be developed in phases, with the first approximately 600,000-square-foot phase encompassing roughly 312,000 square feet of production, equipment and recycling space, 287,000 square feet of warehousing accommodations, 14,000 square feet of office space, as well as other accessory structures. The second phase of the project would yield an extra 216,000 square feet of production and equipment space, 277,000 square feet of warehouse space and additional accessory structures.

The Olathe campus will be twice as large as the 600,000-square-foot project the company put in front of the planning commission in October 2022, and substantially larger than the current production facility, which consists of just 185,000 square feet on 9 acres of land. “This is a generational investment so we’re not just investing for the next 5 years, we’re investing for the next 40,” Bryant said. “We’re building for what we may need in the future so that’s why we got approval for what we think we might do when and if we do a phase two.”

Expansion with intent

Heartland isn’t just expanding for the sake of expanding; the company endeavors to bolster its status as an anchor Coca-Cola bottler in the Midwest. Heartland would be unable to further its goal while operating in its current production facility, which is not only constrained in size; having been built in 1969, it is also limited by its age.

“This [new facility] is going to solidify us as one of the go-to bottlers in the Midwest for a variety of different products,” Bryant noted. “We’ll be able to do more new things and be able to produce more products, which sets us up for other bottlers to come to us when something comes along with the Coke company.”

Olathe’s City Council will be next to consider Heartland’s proposal. In the meantime, the company still has its hands full with nailing down the details, including finalizing internal designs and settling on equipment. If all goes as planned, construction could get underway in the spring of 2023 and reach completion in summer 2024.

The bottling business in metropolitan Kansas City remains strong. Earlier in 2022, Niagara Bottling expanded its footprint in the area with the opening of a 634,000-square-foot facility near the Kansas City International Airport.

The post 1.2 MSF Coca-Cola Facility Gets Green Light in Kansas appeared first on Commercial Property Executive.

Building One. Image courtesy of Sealy & Co.

Sealy & Co. has purchased Building One of I-35 Logistics Park, a 569,584-square-foot distribution and warehousing facility in Olathe, Kan. Scannell Properties sold the Class A asset with the assistance of JLL. The buyer was self-represented.

Completed this June, Building One is fully leased to Clorox, according to CommercialEdge information. The asset, built on 45.3 acres, features a 36-foot clear height, a 136-foot truck court, 76 dock-high mechanical loading doors and three drive-in loading doors. The facility is also set up for a possible 130,416-square-foot expansion.

READ ALSO: Frank Crivello on Industrial “Cool Down”

Building One came online at 15801 S. Green Road as part of I-35 Logistics Park, one of the largest speculative developments in Kansas City. The industrial complex will encompass more than 3.2 million square feet across six buildings when complete.

Situated in one of the region’s most sought-after industrial corridors featuring tenants such as FedEx and XPO Logistics, the facility is within 7 miles of Interstate 35 and close to the BNSF International Intermodal Facility. The location is some 10 miles from another Sealy property, a 210,504-square-foot warehouse that the firm acquired in 2021.

Sealy & Co. seals the deal

Sealy & Co. Managing Director Jason Gandy and Director David Gibbs led the Investment Services team that arranged the acquisition.

Gandy further detailed the strength of the asset’s location to Commercial Property Executive; “The Kansas City industrial market fundamentals remain strong with falling vacancy, consistent rent growth, and a sizeable but slowing construction pipeline. Kansas City’s geographical location and diverse transportation infrastructure make this an ideal market for industrial users.”

The firm is a highly active industrial investor throughout the Midwest. In September, Sealy purchased a 1.1 million-square-foot industrial portfolio in Dayton, Ohio, as well as a 713,796-square-foot distribution facility near Detroit.

Industrial upswing in Kansas City

Attracting investment and development endeavors from some of the sector’s biggest players, Kansas City’s industrial market has seen positive tends across nearly all of its major metrics.

According to data from a third quarter 2022 report from CBRE, the metro had 13.6 million square feet of space in its pipeline at the end of September. More than 4 million square feet were leased in Q3, leading to an overall vacancy rate of 4 percent, down 90 basis points over the quarter.

The post Sealy & Co. Buys Kansas City Industrial Asset appeared first on Commercial Property Executive.

Turner Logistics Center. Image via Google Street View

Electric truck manufacturer Orange EV will relocate its corporate headquarters and manufacturing operations to NorthPoint Development‘s Turner Logistics Center, currently underway in Kansas City, Kan.

Construction on the 407,964-square-foot mixed-use industrial and office facility at 6700 Orville Ave. began in 2021. Orange expects to move by mid-2023, with plans to manufacture 1,800 terminal trucks per year from the new space.

Upon completion, the facility, built on 37.46 acres, will feature 40-foot clear heights, as well as 50-foot by 52-foot column spacing, according to Commercial Edge information.

Situated along the Kansas Turnpike, the facility is within 8 miles of downtown Kansas City, with quick access to numerous shipping nodes around the state. The move will significantly boost Orange’s production capacity, and will also serve as a more convenient location for employees in Kansas City.

Colliers Kansas City President Ed Elder represented Orange in the leasing efforts.

NorthPoint remains an active developer and investor throughout the Midwest, having recently completed Gateway Tradeport IV, a 1 million-square-foot facility in Pontoon Beach in St. Louis, Mo. According to CommercialEdge information, the firm had recently acquired three properties around Kansas City, Mo., totaling nearly 1.2 million square feet.

Kansas City’s Industrial upswings

Kansas City remains both a strong and stable Midwestern market for industrial construction and development, bolstered in part by its swaths of buildable land, cheaper energy prices and investment from tech companies. Data from a third quarter 2022 report from JLL shows that the city had 13.6 million square feet of space in its pipeline, with 6.2 million being absorbed year-to-date. The city’s vacancy rate has fallen to 4.5 percent, with rents rising to $4.98 per square foot, the report showed.

The post NorthPoint Development Lands EV Maker’s Headquarters appeared first on Commercial Property Executive.

7601 Gardner Avenue. Image courtesy of Sealy & Company.

Sealy & Co. has purchased a 70,000-square-foot distribution facility located at 7601 Gardner Ave. in Kansas City, Mo. Sealy & Co. purchased the property in an off-market deal with the building’s owner, Koscielny Property Management.

Sealy & Co. Investment Services directors Jason Gandy and Davis Gibbs arranged the sale with the building’s previous owner, Koscielny Property Management, represented by CBRE Senior Vice President Austin Baier. The property sold for an undisclosed amount.

The sale of 7601 Gardner Avenue take place as Sealy & Co. continues to acquire industrial space throughout the Midwest. In the second quarter of 2022, Sealy & Co. acquired AeroPlex One & Two, a 600,000-square-foot industrial development in Romulus, Mich. Sealy & Co. has also purchased a 438,000-square-foot Etna Township, Ohio, logistics facility.

READ ALSO: Industrial Leasing Reaches Record Volumes

Originally constructed in 1994, 7601 Gardner Ave. is used primarily as a warehouse and distribution facility, fully leased and occupied by Cardinal Health, according to CommercialEdge data. The complex is located within a mile of Interstate 435, offering quick shipping access to downtown Kansas City.

Kansas City’s transformation

The Kansas City area continues to see growth in its industrial sector, as the city transforms into a national industrial hub. A combination of increased demand and development has led to the construction of eight buildings, totaling 3 million square feet of space in the second quarter of 2022, with another 8 million slated for completion by the end of the year, according to a CBRE report from the same period. The average vacancy rate has dropped to 4.9 percent, according to the same data.

The post Sealy & Co. Acquires Kansas City Distribution Center appeared first on Commercial Property Executive.

Airworld 1. Image courtesy of Ascendas Real Estate Investment Trust

Ascendas Real Estate Investment Trust, of Singapore, intends to acquire a portfolio of 11 last-mile logistics properties in metro Kansas City, for $156 million, the REIT’s manager, Ascendas Funds Management (S) Ltd., announced.

The potential sellers are ColFin 2017-11 Industrial Owner LLC and ColFin Cobalt I-II Owner LLC, evidently affiliates of Colony Capital Investment Advisors LLC.

READ ALSO: How the Supply Chain Crisis Impacts Industrial Real Estate

In a prepared statement, William Tay, executive director & CEO of Ascendas Funds Management, noted that this acquisition, which totals about 2.2 million square feet, represents the REIT’s “first entry into the U.S. logistics market and is complementary to Ascendas REIT’s existing logistics portfolio.”

He emphasized the strong market fundamentals for distribution assets and Kansas City’s central location and well-developed transportation infrastructure.

The 11 properties are clustered in Johnson County, Kan., along I-35; in eastern Jackson County, Mo.; and in the Northland submarket, near Kansas City International Airport.

Lackman Business Center 1. Image courtesy of Ascendas Real Estate Investment Trust

The properties range from 73,200 to 348,000 square feet and reportedly are well suited for the typical space demand in these infill locations.

The portfolio is 92.6 percent occupied by 27 tenants from diverse industries, including third-party logistics, wholesale distribution, manufacturing and health care. No single tenant contributes more than 10 percent of the total rental income. The current leases also have built-in annual rent escalations of between 2.5 and 3.0 percent.

Ascendas touted the portfolio’s strong retention rate; the current tenants have been in place for an average of 12.5 years.

Heartland stability

Steady demand and positive net absorption are giving the Kansas City metro’s industrial space market low overall vacancy and rising rents, according to a third-quarter report from JLL. “Vacancy remains historically low at 4.3 percent and even with 8 million square feet of product under construction, current demand will ensure vacancy remains stable and rents continue to rise.”

In April, Scannell Properties started on a 157-acre, $100 million Class A industrial project in Bonner Springs, Kan. When completed, Compass 70 Logistics will have three buildings and total 2 million square feet.

Also in April, Sealy & Co. acquired the 210,500-square-foot Lone Elm Commerce Center in Olathe, Kan., in an off-market purchase from the developer, Heise-Meyer LLC.

The post Ascendas to Acquire Logistics Portfolio for $156M appeared first on Commercial Property Executive.

Congress Logistics Center. Image courtesy of JLL and VanTrust Real Estate

Niagara Bottling will initially create nearly 100 jobs at the new facility when it opens in March 2022. It will be used to produce new beverage products and serve customers in the Midwest, according to Executive Vice President Brian Hess.

READ ALSO: Top 5 Markets for Industrial Transactions

This is the company’s second facility in the Kansas City area. In 2000, Niagara opened a 420,000-square-foot manufacturing plant at the intersection of U.S. Highway 71 and Missouri Highway 150, which employs 90 people. The company operates bottling facilities throughout the U.S. and Mexico, and works with large beverage brands, retailers, grocers, club and convenience stores around the U.S.

Niagara cited the region’s central location, availability of skilled talent and strong community relationships as key drivers of its decision to locate a second facility in Kansas City. An active, centrally located industrial real estate market, Kansas City has grown into a $226 billion food and beverage industry with more than 670 companies located in the area and a workforce of more than 25,000 employed in food and beverage manufacturing, warehousing and distribution.

Tim Cowden, president & CEO of Kansas City Area Development Council, said in a prepared statement that Niagara’s selection of Kansas City reinforces the region’s position as a growing hub for food and beverage production in the U.S. The metro benefits from its proximity to agricultural markets and advanced logistics infrastructure.

READ ALSO: Supply Chain Resiliency To Boost Logistics Demand

KCADC helped attract Niagara company to Kansas City. In the last two years, the region has attracted food and beverage companies pledging to create more than 1,700 jobs, invest more than $330 million and occupy more than 3.5 million square feet, according to KC SmartPort, a nonprofit economic development organization affiliated with KCADC that works to attract freight-based companies to the Kansas City region.

VanTrust Developments

JLL was selected by VanTrust Real Estate, a national real estate developer headquartered in Kansas City, as the exclusive leasing partner for the property. JLL Executive Vice President Phil Algrim led the marketing efforts for the speculative project. He said the shell was complete by June 1.

“Other tenants were interested in the building. However, we engaged with Niagara and came to terms on a purchase,” Algrim told Commercial Property Executive.

In April, VanTrust broke ground on Forney Distribution Center, a 621,874-square-foot speculative industrial property in the East Dallas suburb of Forney, Texas, that is set for completion in May 2022. The submarket directly connects to U.S. Highway 80, Interstate 35 and Interstate 20 within the DFW Metroplex.

VanTrust sold a 715,000-square-foot industrial building in Las Vegas to an entity affiliated with DWS Group and RREEF Property Trust for $88.5 million in September. The distribution center, completed in May 2019, is fully leased to beauty product retailer Sephora.

The post Niagara Bottling Expands in Kansas City appeared first on Commercial Property Executive.

Lone Elm Commerce Center. Image courtesy of Sealy & Co.

Sealy & Co. has grown its presence in metropolitan Kansas City with the acquisition of Lone Elm Commerce Center, an approximately 210,500-square-foot industrial facility in Olathe, Kan. A leader in the industrial real estate market, Sealy acquired the Class A distribution warehouse from its developer, Heise-Meyer LLC.  

READ ALSO: Scannell Properties Launches $100M Kansas City Industrial Project

Sealy relied on the assistance of Mark Long and John Hassler of Newmark for representation in the transaction, which was an off-market deal in the increasingly competitive Kansas City investment-sales environment. “Our relationships in the market and our surety of closing are key advantages in competitive markets like we are in today,” Jason Gandy, managing director, investment services, with Sealy & Co., told Commercial Property Executive. “The outstanding Investment Services team we have in place, coupled with our enterprise financing capabilities, allows Sealy & Co. to be in a position to handle multiple and complex transactions simultaneously.”

Part of a larger industrial park fronting Interstate 35, Lone Elm made its debut on a 12-acre site in early 2019. Wesco Distribution later signed on for nearly 99,000 square feet, or approximately 49 percent of the speculative project, including 2.5 acres for outside storage, making it the lead tenant at the premier property. Sealy was drawn to the Finkle + Williams Architecture-designed facility’s aesthetically enhanced office storefront concept, in addition to tenant-alluring amenities such as extensive parking and substantial paved outdoor storage. The building, which also features a high-efficiency rooftop and ample windows, can also be configured to accommodate an underserved group in the area—tenants in need of smaller spaces of 50,000 to 100,000 square feet.   

Growing plans

Sealy, which is celebrating its 75th anniversary this year, is committed to continuing its growth, as evidenced by its moves in 2021 thus far. Perhaps most notably, the Kansas City transaction marks the company’s second acquisition in just one week. Only days ago, Sealy announced it had made its entrée into the Detroit market with the purchase of a 407,500-square-foot industrial warehouse. And the company says there’s much more to come. “We expect to expand our footprint in several markets this year,” Gandy said. “Our target markets demonstrate a combination of several attributes, including critical industrial infrastructure, positive demographic trends and strong market fundamentals.”

The post Sealy & Co. Expands Kansas City-Area Industrial Footprint appeared first on Commercial Property Executive.

Compass 70 Logistics. Rendering courtesy of Scannell Properties

Scannell Properties has acquired 157 acres in Bonner Springs, Kan., and launched the first phase of the $100 million Compass 70 Logistics. Upon completion, the industrial project will feature 2 million square feet across three buildings.

READ ALSO: Harte Hanks Debuts Kansas City Distribution Center

The site is located at the intersection of Interstate 70 and 11th Street, close to Intersection 435 and more than 16 miles from Kansas City, Kan. The conceptual plans for Compass 70 Logistics comprise three Class A buildings that can be built to suit and include ample auto and trailer parking.

The project marks the third major industrial development in the metro for Scannell Properties in the past 12 months. The other developments are the roughly 1.1 million, build-to-suit 435 Logistics Center in Kansas City currently under construction and I-35 Logistics Park in Olathe, Kan., a 568,000-square-foot speculative development expected to break ground in May. The three projects total more than 6 million square feet.  

At the beginning of the month, an entity connected to Scannell Properties sold a 1 million-square-foot industrial facility in Locust Grove, Ga. The facility is situated on an 85.6-acre site and is less than 30 miles from Hartsfield-Jackson Atlanta International Airport.

The post Scannell Properties Launches $100M Kansas City Industrial Project appeared first on Commercial Property Executive.

Turner Logistics Center, Building I site. Image via Google Earth

Harte Hanks has commenced operations at its new home in Kansas City, Kan., with the opening of its fulfillment and distribution facility at Turner Logistics Center.

The global customer experience company’s 297,000-square-foot space is a recently completed project of NorthPoint Development, owner and developer of the 250-acre master-planned industrial park at the intersection of I-70 & New Turner Diagonal.

READ ALSO: NorthPoint Development Begins First Tampa Project

Harte Hanks committed to Turner Logistics in June 2020 with the execution of a long-term lease with NorthPoint. Building I is an approximately 400,000-square-foot structure carrying the address of 6700 Orville Ave. The facility, which delivered in December 2020, is the first of what will ultimately be eight buildings totaling nearly 3 million square feet at Turner Logistics. The state-of-the-art Building I is registered with the FDA and the Kansas Department of Agriculture and will be ground-zero for Harte Hanks’ distribution of more than 20,000 packages and entrée into e-commerce fulfillment.

Harte Hanks’ move into the new temperature-controlled facility marks a relocation from its former main fulfillment center location in Grand Prairie, Texas, as well as the consolidation of two additional locations at Turner Logistics. “This consolidation initiative and move to the geographic center of our country will allow for significant operational efficiencies within our fulfillment business and will provide improved shipping time and cost for our customers,” Andrew Benett, CEO of Harte Hanks, said during the company’s third quarter earnings conference call on Nov. 12, 2020. “Further investments in technology and light automation will position us to best serve our current and future customers.”

Ascension of Kansas City  

Kansas City has been on the rise as one of the strongest and fastest-growing industrial markets in the U.S. for the last five years. This year is proving to be another successful year, so far with a record 10.1 million square feet of new product under construction in the first quarter, according to a report by Cushman & Wakefield, which is also handling leasing for Turner Logistics. Wyandotte County is rising the fastest and boasts the lowest vacancy rate of the nine submarkets, at just 3.8 percent, and Turner Logistics is the submarket’s centerpiece.

As Cushman & Wakefield notes in the report, Turner Logistics “is almost certainly the most active speculative project in the market.” Turner Logistics’ Building II, a 375,000-square-foot facility, was one-third preleased by the end of the first quarter and is scheduled to reach completion later in 2021. “The expectation is the park will continue to lease rapidly and additional buildings will be under construction soon,” according to the Cushman & Wakefield report.

The post Harte Hanks Debuts Kansas City Distribution Center appeared first on Commercial Property Executive.

Image by falco via Pixabay

Industrial Logistics Properties Trust has expanded its footprint into Kansas with the acquisition of a state-of-the-art net leased distribution center in metropolitan Kansas City. The REIT purchased the 645,000-square-foot building at 17001 W. Mercury St. in Gardner from USIR II – GARDNER LLC, an entity of USAA Real Estate, in a transaction valued at $44 million.

With this acquisition, Newton, Mass.-based ILPT now has a presence in 32 states across the U.S. The REIT has been eager to bolster its portfolio, but the right opportunities have not exactly been plentiful over the last several months. “Strong performance of industrial real estate during this pandemic has continued to attract capital looking for deployment opportunities,” John Murray, CEO of Industrial Logistics Properties Trust, said during the company’s second quarter 2020 earnings conference call on July 29, 2020. “As such, competition has been strong and cap rates continue to hold steady, especially for newer, long-term leased credit tenant buildings, which ILPT targets for its portfolio.” With 17001 W. Mercury, ILPT emerged victorious.

READ ALSO: Demand for Modern Industrial Facilities Fuels the Pipeline

Located roughly 30 miles southwest of downtown Kansas City, 17001 W. Mercury opened in 2018, having been developed by USAA and LS Commercial Real Estate as a build-to-suit for current tenant Excelligence Learning Corp. at a cost of $38 million. Excelligence occupies the fulfillment center under a long-term lease with approximately 12 years remaining.

Room for Growth

In addition to a steady income stream for the next decade-plus, 17001 W. Mercury offers ILPT upside potential; the 57-acre property includes land capable of accommodating future expansion.

While ILPT has not committed to any development projects, a new addition to the site would likely be met with a warm reception. Industry experts expect the industrial sector to continue to perform well across the U.S. in 2021, and the Greater Kansas City area—of Kansas and neighboring Missouri less than five miles away—is no exception. “Bulk Industrial demand remains high, with total vacancy near a 14-year low,” according to JLL’s 2021 Midwest industrial outlook report, and developers have broken ground on 5.8 million square feet of industrial space in 2020.

The post ILPT Enters Kansas With $44M Industrial Purchase appeared first on Commercial Property Executive.

2119 E. Kansas City Road

Kessinger Hunter has arranged a 253,440-square-foot, full-building lease renewal at one of DRA Advisors’ industrial properties in Olathe, Kan.

Principal Dan Jensen and Associate Broker Kurt Jensen negotiated on behalf of the owner, while Ed Elders, president of Colliers International’s Kansas City office, assisted the tenant, Schlage Lock Co.

Located on a 12-acre parcel at 2110 E. Kansas City Road, the building was completed in 1998. The property features a 15.4 percent office build-out, one grade-level and 30 dock high doors, as well as 210 parking spaces. The tenant, a manufacturer of commercial and consumer locks, will occupy the facility on a long-term lease.

The property changed hands in December 2019, when Sealy & Co. sold it to DRA Advisors in a $908.5 million portfolio transaction. The deal included 106 warehouses encompassing 16.3 million square feet of logistics space in 16 markets across the Midwest, Southeast and Southwest.

The site is a short distance from Interstate 35, which also provides access to Interstate 435. The building is approximately 19 miles southeast of Kansas City, Mo. Other companies with a presence in the I-35 industrial corridor include Deluxe Corp., Tradewind Energy and Amazon.

In October, Amazon started work on a 2 million-square-foot expansion in Kansas. The company will develop two new fulfillment centers in the state—one in Kansas City and the other in Park City.

The post Kessinger Hunter Brokers 253 KSF Kansas Warehouse Lease appeared first on Commercial Property Executive.

Amazon fulfillment center. Image courtesy of Amazon

Amazon has begun site work at two new fulfillment centers in Kansas—one in Kansas City and another in Park City. Each industrial property will span approximately 1 million square feet. Slated for completion in 2021, the facilities are expected to add 1,000 jobs to the region.

The Kansas City warehouse will rise on a 382-acre site at 9700 Leavenworth Road. Scannell Properties owns the land, according to Yardi Matrix data. Named Project Superbowl, the 1.1 million-square-foot Amazon building will have an estimated cost of $110 million, according to Kansas City Business Journal. The site is a short distance from Interstate 435 and 22 miles from Kansas City International Airport.

The Park City facility will occupy 52 acres at 7130 N. Broadway Ave. USAA Real Estate holds title to the land, according to public records. The property is 2 miles from Interstate 135 and 14 miles northeast of Wichita’s Dwight Eisenhower International Airport.

In addition to the two large warehouses, the e-commerce giant will open a smaller distribution center in Wichita, Kan. Located on 9 acres at 4044 N. Toben St., the 140,000 square-foot property is scheduled for completion later this year. Crossland is the owner of the land.

In September, a joint venture between Seefried Industrial Properties and Clarion Partners delivered a 1.1 million-square-foot Amazon property in Orlando, Fla. Wells Fargo provided a $68.5 million construction loan for the project.

The post Amazon Begins 2 MSF Kansas Expansion appeared first on Commercial Property Executive.

Rock Haven Medical Mall. Image courtesy of Montecito Medical Real Estate

Montecito Medical Real Estate has purchased Rock Haven Medical Mall, a nearly 76,000-square-foot medical office building in Harrisonville, Mo. CEAH Realtors sold the Class A property nine years after completing its first phase of development, according to Yardi Matrix. Institutional Property Advisors and Colliers International arranged the transaction.

Developed in phases in 2011 and 2014, the two-story building at 2820 E. Rock Haven Road is adjacent to Cass Regional Medical Center, a general acute-care hospital that also anchors Rock Haven Medical Mall. Cass leased 25,000 square feet in the building for five of its clinics providing a wide array of specialty services. The property’s tenant mix includes Harrisonville Family Medicine, Carondelet Health Cardiology, Cass Regional Orthopedics, Gillen Pharmacy and Fresenius Medical Care.

The 5-acre asset is less than 3 miles from downtown Harrisonville, just north of Interstate 49, as well as 1 mile west of a dense retail area alongside Route 291, which also includes two hotels.

IPA’s Joe Massa worked together with Drew Quinn and Bob Galamba of Colliers International to facilitate the deal. Massa was also instrumental in Montecito’s 2019 purchase of a 221,000-square-foot medical office building in Murfreesboro, Tenn.

The post Montecito Medical Real Estate Acquires Missouri MOB appeared first on Commercial Property Executive.

Ryan Schneider, Executive Vice President, JLL. Image courtesy of JLL

Following a strong 2019, Kansas City’s office market was expected to have a positive 2020. However, the coronavirus outbreak has shifted office dynamics, creating an unfavorable environment for landlords. JLL’s Kansas City-based Executive Vice President Ryan Schneider details how the pandemic pushed the metro toward a tenant-favorable climate and talks about the key factors that will define office culture and business in the future.

READ ALSO: CPE’s Coronavirus Coverage

How would you describe Kansas City’s office sector before the coronavirus outbreak?

Schneider: The first quarter in Kansas City saw asking rents remaining stable, and the construction pipeline continuing to deliver. Net absorption turned negative and total vacancy rose 1.4 percent to 12.4 percent. In a midsize market like Kansas City, a few vacated spaces can have a substantial impact on the statistics.

Kansas City’s office market had a very strong 2019, with over 860,000 square feet of positive absorption. Vacancy remained stable, under 11.5 percent, and Class A rental rates rose to almost $24.50 per square foot. Kansas City was poised to have an exciting 2020, with the delivery of two new Class A office buildings and the groundbreaking of two or three speculative Class A office buildings in Overland Park and downtown Kansas City.

Kansas City. Image via Unsplash.com

How has Kansas City’s office market been impacted by the pandemic? Which aspect of the industry has been disrupted the most?

Schneider: We’ve seen sublease activity rise substantially, but the overall impact of COVID-19 is still uncertain. Several Class A office buildings will be delivered in 2020, which, when mixed with a rise in sublease availability, creates an abundance of supply in the short term. Demand has remained slow, as companies decide if they want to adopt new office strategies now, or wait until 2021 to make long-term decisions about their real estate. Additionally, total absorption in Kansas City through the second quarter of 2020 was 183,256 square feet, demonstrating that demand is lagging compared to 2019.

These factors have led to pricing pressure—a historically landlord-favored market has softened and is slightly changing, in favor of the tenant.

What are the most important issues landlords and tenants need to address during this pandemic?

Schneider: Prior to making medium- or long-term decisions about office space requirements, companies need to find out from employees how and where they want to work. While some of us have the benefit of a functional home office, this is not always the case.

Flexibility is key. As companies begin the reentry process, we are seeing more flexible work schedules to accommodate employees’ obligations and social distancing within office spaces. As we emerge from the pandemic, workspaces will be reimagined as “the next normal.”

READ ALSO: Office Reopening Best Practices From NAIOP

The adoption of remote work has prompted companies to rethink their strategies and look for options to cut costs and reduce footprints. How has this affected Kansas City’s office market?

Schneider: We have found that many employees have remote work situations that are sub-optimal for a myriad of reasons, which makes it materially more productive to work within an office setting. Additionally, people are social animals. We believe the social interaction provided by an office can be key to well-being, efficiency and creativity, and that will drive people back into the office. According to our workplace experience survey, many people are looking forward to returning to office spaces to collaborate, think creatively and connect with their teams.

We also realize that the social interaction provided by an office can be key to supporting the vibrant culture and lifestyle that helps attract, retain and develop talent. We spend more of our waking hours at work than anywhere else, so our sense of purpose and normalcy is often tied to, and contingent upon, our place of work. Therefore, it is likely that a true sense of normalcy for office workers will not be reestablished until they are able to return in some capacity.

Kansas City. Image via Pixabay.com

The pandemic kick-started trends such as the decentralization of urban businesses, urging companies to take up offices in the suburbs. Do you expect this trend to impact Kansas City’s office market?

Schneider: As more companies adopt increasingly distributed corporate ecosystems, flexibility will be key to employee satisfaction as the office remains a fundamental part of the corporate culture. According to JLL, 67 percent of real estate decision-makers are increasing workplace mobility programs, while only 4 percent indicated they would be contracting those programs.

Still, reentry will be staggered and phased, with some functions continuing to operate remotely, at least part of the time. We are counseling clients to think through ways to rebuild office culture, spanning both on-site and remote employees, to create a sense of community in the new normal.

Kansas City’s urban core is not nearly as dense as places like New York and Chicago, where trends seem to be pushing office users to the suburbs. We don’t see this being something that impacts current occupiers in Kansas City, but we do hope this leads companies who are not located in Kansas City to consider opening or relocating within our great city.

READ ALSO: Why Suburbs, Secondary CRE Markets Will Benefit From the Next Recovery

When do you expect office space demand to pick up again and reach pre-pandemic levels?

Schneider: That’s the million-dollar question. If sublease space continues to hit the market, it will likely have a significant influence on broader market dynamics. We are already seeing concessions increase due to the larger supply of space on the market, but if the supply continues to increase and new space continues to deliver, we could see rents drop. For tenants looking for new space, this could be a great time to take advantage of market conditions as they shift to a tenant-favorable dynamic.

How has investor interest in Kansas City’s office market changed over the first half of 2020?

Schneider: Continued stabilization of debt markets bodes well for restored liquidity. As reentry begins in some states and ramps up in others, additional critical data points will emerge surrounding occupiers’ near-term occupancy plans, providing further clarity to the marketplace that will help liquidity return. Investors appear to be anticipating this, with several deals relaunching or preparing to resume marketing.

JLL will be taking several office assets to market in the third quarter of the year, which will give a good indication of investor interest in this market.

When do you expect Kansas City’s office sector to bounce back and how will the recovery unfold?

Schneider: The key to restarting the office sector will be to find the middle ground to establish critical in-person moments, while continuing to enhance work-from-home options. Our clients are balancing the need to drive business with the realities of regional reaction to the coronavirus and concerns of their workforce.

We are anticipating 2021 will be a busy year in Kansas City’s office market. Tenants are pushing back. A large number that was targeting real estate decisions in 2020 ended up pushing those decisions to 2021 or 2022 by executing short-term renewals. Combine that with tenants that have been targeting real estate decisions in 2021 for several years, and companies that continue to evaluate if they need to grow their footprint or shrink their footprint due to COVID-19, we expect an above-average amount of relocation interest from tenants in 2021.

The post Kansas City’s Office Market Amid COVID-19 and Beyond appeared first on Commercial Property Executive.

SurePoint Self Storage Facility in Kansas City. Rendering courtesy of JLL

StorageMart has finalized the acquisition of a two-property self storage portfolio encompassing 1,692 units in Kansas City, Kan. JLL Capital Markets assisted the seller and developer, SurePoint Self Storage. The newly-constructed facilities total approximately 258,000 square feet. At the time of sale, First National Bank of Omaha provided a $16.7 million loan for the buyer, according to DataTree.

The portfolio included the 137,000-square-foot property at 12020 Glenwood St. in Overland Park and the 121,000-square-foot property at 15282 W. 134th Place in Olathe. Both facilities, which came online earlier this year, feature climate-controlled and drive-up access units, security cameras, elevators and a management office that sells moving supplies. More than 85,000 people live within 3 miles of each location, according to JLL data.

In 2018, SurePoint Self Storage received a $7.4 million construction loan from SNL Financial for the 908-unit Overland Park facility, Yardi Matrix shows. Additionally, that same year, Security Bank of Kansas City originated a $6.9 million development note for the 784-unit property in Olathe.

The brokerage team included JLL Managing Directors Brian Somoza and Steve Mellon, Vice President Andrew Fischer and Senior Associate Henry Weiler.

In May, StorageMart opened a 62,150-square-foot self storage facility in Fredericksburg. The company funded its first ground-up project in recent years with a $7.5 million mortgage from Central Bank.

The post StorageMart Acquires 2 Facilities in Kansas City appeared first on Commercial Property Executive.

Procter & Gamble Kansas City Plant. Image courtesy of JLL

JLL has arranged the sale of Procter & Gamble’s multi-building, 574,000-square-foot industrial campus in Kansas City, Kan. A partnership between New Mill Capital and Gordon Brothers Group acquired the property, according to public records.

The JLL team that assisted the seller included Managing Regional Director Kevin Wilkerson and Executive Vice President Phil Algrim.

Located on 66 acres at 1900 Kansas Ave., the manufacturing facility was built in 1905 and expanded in the following decades. The industrial site is close to the intersection between U.S. Route 69 and Interstate 70 and features direct access to rail service. Downtown Kansas City is 5 miles east of the property and Charles B. Wheeler downtown Airport is 6 miles out.

Though the company announced in 2018 that it would close the century-old plant, Procter & Gamble signed a lease for at least the rest of the year. The property comprises 160,000 square feet of office, 186,000 square feet of manufacturing and 200,000 square feet of warehouse and distribution space.

Last month, JLL secured a $991.8 million loan on behalf of California State Teachers’ Retirement System. The 17-building, 7 million-square-foot portfolio includes nine industrial facilities, five office properties and three multifamily assets.

The post JLL Closes Sale of Procter & Gamble’s Kansas City Campus appeared first on Commercial Property Executive.

Beverly Center, Los Angeles. Image courtesy of Taubman Centers Inc.

Simon Property Group Inc.’s pending acquisition of an 80 percent interest in Taubman Centers Inc.’s The Taubman Realty Group LP will give Simon majority ownership of some of the highest quality malls in the U.S. And the $3.6 billion price tag on the 25 million-square-foot portfolio serves as a vote of confidence in the future of premier malls amid a challenging climate for lesser quality shopping destinations.

Of the 24 super-regional shopping centers involved in the transaction, 21 are located in the U.S. and three can be found in Asia. The portfolio includes such notable properties as the nearly 900,000-square-foot Beverly Center in Los Angeles, which emerged from a half-billion-dollar makeover in late 2018; the 1.3 million-square-foot Country Club Plaza in Kansas City, Mo.; and the Mall at University Town Center in Sarasota, Fla., featuring 880,000 square feet. Assets in Asia include Starfield Hanam, a 1.7 million-square-foot center in Hanam, Gyeonggi, South Korea.

“Admittedly, Taubman is a much smaller mall REIT than Simon, but it’s a company that has well above-average sales productivity in their centers—the Mall at Short Hills [in Short Hills, N.J.], Cherry Creek [in Denver], Waterside Shops in Naples,” James Sullivan, managing director & REIT analyst with BTIG, told Commercial Property Executive. “So, they’re really focused in very strong local residential markets in the U.S. that have very high sales numbers and rich revenue.”

READ ALSO: Experiential Retail: What You Need to Know in 2020

The Taubman portfolio was 94 percent leased in the fourth quarter of 2019 and recorded U.S. comparable sales totaling an average of $972 per square foot. The deal marks an upgrade for Simon, as while Taubman’s portfolio is comparatively small, its average quality is higher than the average quality of Simon’s holdings.

LONG LIVE THE (CLASS A) MALL

Simon’s cash acquisition of all Taubman common stock amounts to $52.50 per share, marking a 51 percent premium to Taubman Centers’ closing price just days ago on February 7. “While they’re paying a 51 percent premium to the closing price, these stocks have sold off 60 percent over the past 15 months so it’s at a discount to where it was trading back in 2018 and it’s at a discount to where just about everybody on the street pegs where the actual underlying value of the real estate should trade,” Kevin Brown, equity analyst with Morningstar, told CPE.

Country Club Plaza, Kansas City, Mo. Image courtesy of Taubman Centers Inc.

Simon plans to rely on existing liquidity to fund the multi-billion-dollar Taubman purchase. Both Sullivan and Brown agree that while this is a big-ticket deal, Simon—graced with size and an investment-grade balance sheet—will likely be able to take out long-term debt and equity to pay down their credit facility as pricing on debt and equity moves to a better position over the next couple of years.

“[The Taubman acquisition] shows that Simon is in this for the long term and they are some of the smartest people in the space out there, and it gives everybody confidence that at least with the Class A malls, there is a long-term viability and potential there,” Brown noted. “If Simon says it’s too good to pass up, it sends a signal that Class A malls are undervalued.” High-end mall REIT Macerich saw its stock go up 11 percent on news of the Simon-Taubman agreement, but the reaction has been different for Class B and Class C mall owners. PREIT stock was up just 3 percent, and CBL Properties’ stock went on the downswing. “This gives credence to the he story I’ve been telling investors over the last year; we’re looking at a bifurcation of retail where the top 100 malls are going to continue to see very strong, solid growth but the headlines are going to be dominated by stories of store closures and dying malls that are all going to happen in the Class B and C category,” he added.

LONG TIME COMING

Simon has been pursuing major acquisitions for a few years now.

In 2015, Simon made a failed unsolicited bid for Macerich, ultimately proposing to buy the mall REIT’s outstanding shares for $23.2 billion, including the assumption of debt, before rescinding the offer.

More recently, news emerged last week that Simon had joined Brookfield and Authentic Brands Group on the proposed acquisition of most of fashion retailer Forever 21’s business in a stalking-horse bid of $81 million. The Taubman deal, however, is a gamechanger. “This is a really good move for Simon. There are only a select number of Class A malls in the U.S. and those malls just don’t become available every day,” Brown said. The transaction is on schedule to close in mid-2020.

The post Simon’s $3.6B Taubman Buy a Positive Sign for Class A Malls appeared first on Commercial Property Executive.

Image via Pixabay

Evergy, the parent company of Kansas City Power & Light, has announced plans to reduce its carbon output and add consistent renewable energy power to its fleet. By 2050, the utility provider will reduce carbon dioxide emissions by 80 percent below 2005 levels and will expand its wind energy portfolio by 660 megawatts. By the end of this year, Evergy estimates it will reach an emissions reduction of 40 percent.

To achieve the emissions cutback, the company plans to retire nearly all coal power plants in its fleet at the end of their useful life—estimated to be in the 2040-2050 decade. Exception is the Iatan 2 power plant in Missouri, an 850-megawatt facility that began operating in 2010.

READ ALSO: Falling Renewable Costs Trigger ‘Coal Crossover’

Moreover, the Wolf Creek Nuclear Station, the state’s first nuclear power generating station, built in 1985, and which generates about 1,200 megawatts of electricity, will continue to operate only until its license expires in 2045. Evergy’s plan includes the addition of a small amount of natural gas generation if additional carbon-free generation is not available within the timeframe.   

Higher winds

Image via Pixabay

The 660 megawatts of wind power that will be added to the company’s fleet will come from four new projects, which will boost Evergy’s total wind generating capacity to more than 4.5 gigawatts. This will place it in the top five wind energy companies in the U.S.

These four new wind projects are estimated to bring some $180 million economic benefits to the region in addition to hundreds of construction jobs and dozens of permanent green energy jobs. The facilities are:

• Expedition Wind—a 199-megawatt park developed by National Renewable Solutions in Marion County, Kan.
• Flat Ridge 3—a 128-megawatt addition to the existing 520 megawatts of wind power generated by the first two phases of the Flat Ridge project. This third module is developed by AEP Renewables near Kingman, Kan.
• Jayhawk Wind—a 193-megawatt facility developed by Apex Clean Energy in Crawford and Bourbon Counties, Kan., of which Evergy will acquire 155MW.
• Ponderosa Wind will have a generating capacity of approximately 200 megawatts of power, of which Evergy will acquire 178MW. The project will be developed by a subsidiary of NextEra Resources south of Liberal, Kan., in Oklahoma.

The post Evergy to Cut Carbon Output, Boost Wind Capacity appeared first on Commercial Property Executive.

The Kings

Berkadia has arranged the sale of The Kings, a 408-unit, garden-style community in Kansas City, Mo. Stoneweg purchased the property from Sundance Bay and Drake Real Estate Partners, for $27.7 million, according to Yardi Matrix data. Bellwether Enterprise Real Estate Capital originated a $20.8 million, 10-year Fannie Mae loan to finance the acquisition. 

Berkadia’s Senior Managing Director Alex Blagojevich, Senior Director Michael Sullivan and Director Brett Meinzer worked on behalf of the seller in the deal. Recently, another Berkadia team facilitated the $47 million sale of a 291-unit community outside Fort Lauderdale, Fla.

The Kings is a 15-building property that occupies more than 20 acres at 11330 Colorado Ave., 14 miles south of downtown Kansas City. The property is alongside Interstate 49, within 2 miles of a cluster of eateries and shopping options on Blue Ridge Boulevard.

Constructed in two phases in 1975 and 1987, the structures encompass a mix of studio, one-, two- and three-bedroom units, averaging 824 square feet. Property amenities include a fitness center, a clubhouse, a playground, two swimming pools, a spa and laundry facilities. The Kings was renovated in 2016 and the buyer plans to further upgrade the unit finishes and community amenities.

If you’d like to be featured in Brokers’ Corner, send your deal to deals@cpe-mhn.com. 

The post Berkadia Facilitates $28M Missouri Sale appeared first on Commercial Property Executive.

Kansas City Hyatt House. Image courtesy of Petros PACE Finance

Petros PACE Finance has closed an $8 million Commercial Property Assessed Clean Energy deal with Pederson Development Co., to finance energy efficiency measures in the construction of a 13-story Hyatt House hotel at the southwest corner of Ninth Street and Broadway in Kansas City’s Garment District. The transaction marks Petros’ fourth C-PACE deal in Missouri. 

The developer will use the financing to integrate a number of sustainable building features into the project, including HVAC systems, LED lighting, elevators and energy-efficient roofing, windows and walls. The development’s features are expected to lead to savings in utility and maintenance costs exceeding $7 million and reduce carbon dioxide emissions by nearly 1,200 metric tons. 

The 153-key project will be the first Hyatt House in the region. Construction is anticipated to start at the end of October, with completion slated for January 2021. Brinkmann Constructors is acting as the general contractor for the project, and Show Me PACE is the administrator of Jackson County’s PACE program. 

The post Kansas City Hotel Project Lands C-PACE Support appeared first on Commercial Property Executive.

K-7 Marketplace. Image via Google Street View

Block & Co. has sold K-7 Marketplace, a 11,172-square-foot neighborhood retail center in Lenexa, Kan. The firm’s David Block, Phil Peck and Greg Roberts brokered the deal.

Located at 22903-22917 W. 83rd St. in Johnson County, the shopping center is at the southeast corner of K-7 Highway and 83rd Street. K-7 Marketplace is close to major office and warehouse employers. Additionally, a regional sports facility, 3 & 2 Baseball Complex, is less than a mile from the shopping center.

READ ALSO: KC’s Crown Center Nabs New Tenants

Callahan’s Restaurant, Breathe Yoga, Believe Hair and Tim’s Liquors occupy the property. A 1,200-square-foot in-line space and a 1,836-square-foot end cap restaurant space are available for lease. Roberts and Peck will be in charge of leasing services on behalf of the new ownership. Block & Co. will continue to handle property management for the asset.

In July, Peck was also part of the team that facilitated the sale of Raintree Village Shopping Center, a 33,340-square-foot retail property in southeastern Kansas City, Mo. Located on more than 8 acres, the Lee’s Summit, Mo., asset is within 33 miles of K-7 Marketplace.

If you’d like to be featured in Brokers’ Corner, send your deal to deals@cpe-mhn.com.

The post Kansas City-Area Retail Center Changes Hands appeared first on Commercial Property Executive.

Marriott Kansas City Overland Park. Image via Google Street View

A joint venture of Wexford Lodging Advisors and Trinity Private Equity Group has acquired Marriott Kansas City Overland Park, a 398-key hotel in the southwestern part of the Kansas City metropolitan area. The partnership plans to implement a comprehensive renovation project totaling $17 million. Davidson Hotels and Resorts will operate the 11-story property.

Located at 10800 Metcalf Ave., the building is just off Interstate 435, within 20 million square feet of office space. Major headquarter offices, including Black & Veatch, Sprint, YRC and AMC Theaters, are nearby. Plans call for a full guestroom remodel and the renovation of the meeting space and lobby. Additionally, a concierge lounge and a new fitness facility are also set to be added.

Marriott Kansas City Overland Park is Wexford Lodging Advisors’ second acquisition with Trinity Preferred Equity Group, following the DoubleTree Suites Nashville Airport purchase in April. According to public records, Hospitality Ventures Management Group sold the property for roughly $13.4 million.

The post JV Picks Up Suburban Kansas City Hotel appeared first on Commercial Property Executive.

Milano Italian Dining. Image courtesy of PB&J Restaurants

Local group PB&J Restaurants is set to bring Burnt End BBQ and Starbucks to Crown Center Shops in downtown Kansas City, Mo. Milano Italian Dining, an 8,400-square-foot restaurant on the first floor of the property, is set to close at the end of this month. Burnt End BBQ and Starbucks will take over the space and open new venues by late December.

Located at 2405 Grand Blvd., Crown Center Shops includes hotels, entertainment, dining, shopping, offices and residential options in the city’s core. The development currently encompasses more than 40 shops and restaurant. PB&J Restaurants is working with local architecture firm BRR Architecture to fully renovate the space occupied until now by Milano Italian Dining. Burnt End BBQ will occupy 6,200 square feet and a Starbucks will move into the remaining 2,200 square feet. This location will be Burnt End BBQ’s third venue, with two other restaurants in Denver and Overland Park, Kan.

READ ALSO: Stanton Road Capital Buys KC Trophy Asset

Crown Center Shops is an 85-acre property opened in 1971 that serves as the international headquarters of Hallmark Cards. Every year, the property attracts more than five million visitors due to its featured attractions—Sea Life Aquarium Kansas City and Legoland Discovery Center. Crown Center is also home to two theaters as well as the Midwest at Sheraton Kansas City and The Westin Kansas City hotels.

The post KC’s Crown Center Nabs New Tenants appeared first on Commercial Property Executive.

Sprint’s headquarters in Overland Park. Image courtesy of Occidental Management

Occidental Management, a Kansas-based development and management firm, has officially closed on its purchase of the sprawling Sprint headquarters campus in Overland Park, Kan. The 190-acre corporate campus was sold by Sprint, which first announced the deal agreement back in March.

Sprint will still operate its headquarters at the Class A campus, but the deal will entail Occidental leasing back to Sprint the areas of the campus the company still occupies, particularly the southern portion of the campus, according to Occidental. The new owner plans to make upgrades to portions of the property and will announce more details later this year. Sprint will reportedly relocate from 11 buildings it currently occupies to four surrounding buildings on the campus, according to a Nasdaq article from earlier this year.

Adding to its ranks

The deal comes amidst rumors that Sprint’s merger with T-Mobile is on the verge of approval. According to the Kansas City Star, once the merger is finalized, T-Mobile plans to maintain a second headquarters at the campus.

The 3.9 million-square-foot campus was built in four phases between 1998 and 2001. Located at 11501 Outlook St., the 20-building corporate headquarters is situated about 20 miles from downtown Kansas City. The five-story property includes retail and 12,500 parking spaces. As of this month, the vacancy rate at the campus is 8.2 percent, per Yardi Matrix data.

In nearby Lenexa, Kan., a trio of developers recently opened The District at City Center Lenexa, a mixed-use development that includes 30,000 square feet of retail space, 175 apartment units and 45,000 square feet of office space.

The post Sprint Closes Sale of 4 MSF Campus appeared first on Commercial Property Executive.

The ribbon-cutting ceremony at The District. Image courtesy of Copaken Brooks

Copaken Brooks, EPC Real Estate and Woodbury Corp. have opened the doors of The District, a mixed-use project in Lenexa, Kan. The suburban project includes 45,000 square feet of office space, 30,000 square feet of retail and 175 residential units. The District is part of City Center Lenexa, a 200-acre master plan project currently in the works.

READ ALSO: Building a Modern Kansas City

Located at the intersection of Interstate 435 and 87th Street in western Johnson County, The District is 20 minutes from downtown Kansas City, Mo., and 30 minutes from Kansas City International Airport. The property features three Class A office buildings with 5,000-square-foot floorplates. Retail spaces range between 1,200 and 6,000 square feet. Parking garages accompany the commercial spaces. According to the Kansas City Business Journal, several tenants are already occupying space at The District, including the architecture firm that designed the project, Klover Architects.

When completed, City Center Lenexa will consist of more than 2 million square feet, including nearly 1 million square feet of office and retail and 375 residential units. According to EPC Real Estate’s website, a $60 million Civic Center is now underway at the site. The project is set to include the Lenexa City Hall, a recreation facility, public library, structured parking and an art gallery.

The post Mixed-Use Development Opens in Suburban Kansas City appeared first on Commercial Property Executive.

Plaza Vista. Image courtesy of HFF

With the assistance of HFF, EverWest Real Estate Investors has completed the disposition of Plaza Vista, a 243,700-square-foot office building in Kansas City, Mo., in a transaction valued at $118.3 million. EverWest sold the 100 percent leased trophy property to Platform Ventures.

EverWest had owned Plaza Vista since 2014, when it acquired the building from its developer, VanTrust Real Estate, for $104 million. Designed by 360 Architecture, the office property first opened its doors at 900 W. 48th St. in the coveted Country Club Plaza submarket in 2013 as the headquarters of law firm Polsinelli. The firm continues to anchor the 10-story tower, which also features 16,000 square feet of retail space. Plaza Vista garnered a notable amount of attention from an investment community that has grown increasingly keen on the Kansas City office market over the years.

“The investment interest in the Kansas City area continues to be strong, with a growing number of national investors considering the market,” Peter Merrion, senior director with HFF, told Commercial Property Executive. “The region’s work in infrastructure improvements such as the Streetcar and Airport renovation, combined with strong job growth by many corporate users is helping to drive new interest to the market and giving our team continued optimism for the investment fundamentals in the KC market.”

HFF’s Mark Katz and Danny Kaufman, both senior managing directors, joined Merrion in the representation of EverWest on the Plaza Vista transaction.

Secondary market, primary interest

As noted in a first quarter 2019 report by Colliers International, investors continue to chase yields in fundamentally sound secondary markets; Kansas City is one such market. The list of office investors that have set their sights on Kansas City over the last year includes City+Ventures, an Omaha, Neb.-based company that entered the market for the first time with the $88 million acquisition of the 784,557-square-foot Southlake Portfolio during the first quarter of 2019. Last summer, Glen Allen, Va.-based Lingerfelt CommonWealth Partners announced its first foray into the market with the joint venture purchase of 2345 Grand Blvd., an approximately 538,700-square-foot office building. “Over the past 5 years, we have increasingly seen a more national audience pursue deals here,” Merrion added.

The post EverWest Sells Kansas City Office Tower for $118M appeared first on Commercial Property Executive.

Rendering of Streets of West Pryor. Image courtesy of Drake Development

Drake Development has begun work on a 70-acre, $180 million mixed-use project near Kansas City, Mo., dubbed Streets of West Pryor. When completed, the development will include a 63,000-square-foot McKeever’s Market grocery store, more than 220 luxury units, a 165-key hotel and roughly 160 age-restricted units. Additionally, national and local retail stores and restaurants are also part of the project.

Located at the intersection of Interstate 470 and NW Pryor Road, Streets of West Pryor will be built on one of the last large infill sites in the Kansas City metro area. The project combines 13 parcels previously owned by eight different owners. Developed by Pearl Cos., the community is set to include underground structured parking, a pool, a fitness center and multiple courtyards.

Streets of West Pryor will also incorporate the adjacent Lowenstein Park into its design as green space. The project is expected to be delivered by the summer of 2020.

Mixed-use developments are transforming many suburban areas in the Midwest,  bringing an urban feel to the suburbs. One North, which is adjacent to established neighborhoods in the city’s historic Northeast, is a similar project. Another example of suburban urbanism is CityPlace, a mixed-use development in a suburban corridor in central Overland Park.

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4001 Blue Parkway. Image via Google Street View

The 69,000-square-foot 4001 Blue Parkway office building in Kansas City, Mo., has reached 100 percent occupancy. Developer and owner Community Builders of Kansas City has signed a five-year lease with Mid-America Assistance Coalition for the last 3,000 square feet available.

Located in the Blue Parkway corridor, the three-story building was developed in 2003 following CBKC’s $10.5 million investment. The space is now a community service hub, with tenants including engineering consulting firm 3T – Design & Development, Holliday Law Firm, Mid Star Lab Clinic, Crystal Home Care, Mazuma Credit Union and Legal Aid of Western Missouri. Colliers International served as leasing agent.

“With average occupancy for commercial real estate in Kansas City at 91 percent in the fourth quarter of 2018, we are especially excited to announce full occupancy at one of our flagship developments,” said CBKC President & CEO Art Chaudry, in prepared remarks.

Roughly 15 miles away, eye-care services provider Retina Associates recently leased an additional 8,580 square feet at 6201 College Blvd. in Leawood, Kan. After signing this lease in March, approximately 30,000 square feet of the building’s total 145,215 square feet remained unoccupied.

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Park Central Plaza. Image courtesy of Yardi Matrix

Park Central Plaza, a 146,884-square-foot office campus in Kansas City, Mo., has changed ownership. City Ventures acquired the two-building asset from Canada-based Sun Life Financial, according to Yardi Matrix data. The property traded for an undisclosed amount, but the buyer took out a $24 million, seven-year loan to finance the acquisition. JPMorgan Chase originated the financing. Back in 2011, the life insurance company paid $18 million for the asset.

Located at 4717 Grand Blvd. within a premier office submarket, Park Central Plaza I and II provide easy access to several retail and dining options. The 1990-built property in Country Club Plaza includes 10,000 square feet of retail space and 479 parking spaces. Oakstar Bank, Designer Group, Krause & Kinsman Law Firm and NCM Associates are among the tenants of the LEED-certified buildings.

According to the Kansas City Business Journal, JLL arranged acquisition financing on behalf of the buyer and represented the seller in the transaction. Last year, Sun Life also sold a 223,118-square-foot office portfolio in the Raleigh-Durham, N.C., area for $30.6 million.

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The Shoppes at North Village

Berengaria, a Marcus Investments portfolio company, has added The Shoppes at North Village to its retail portfolio in the Midwest. The 226,000-square-foot retail center in St. Joseph, Mo., represents the third asset the firm bought in a joint venture with the Africk Family Office.

Colliers International brokered the deal on behalf of the buyers. The acquisition price was partially covered via a loan with Nodaway Valley Bank.

The property is located at 5201 N. Belt Highway along the Interstate 29 freeway and approximately 55 miles from Kansas City. Home to 25 tenants, the retail center is shadow-anchored by Target, Wal-Mart, Sam’s Club, Home Depot and Kohl’s as well as several restaurants and wellness companies. The asset was 98 percent leased at the time of sale.

“The Shoppes at North Village is the premier shopping center not just within St. Joseph but in the entire region,” said Jay Peirick, president of Berengaria, in a prepared statement.

Image courtesy of Marcus Investments

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Cameron Duff, Vice President, Jones Development

Jones Development has welcomed Cameron Duff as vice president of its investments team. A licensed real estate broker in Missouri, Duff will oversee the firm’s business development efforts with a focus on value add investments.

“It’s a ripe market for value add investments and Cam’s experience gives Jones Development a competitive advantage in finding, and competing for, those opportunities,” said Executive Vice President Chris Jones in a prepared statement.

Duff brings more than 10 years of experience as a commercial real estate broker and was previously a co-owner of Bird Dog Industrial, a real estate investment firm. In 2015, he graduated the Greater Kansas City Chamber of Commerce’s Centurion’s leadership development program.

Jones Development has been working on a variety of developments in 48 states nationwide as well as five Canadian provinces. The company’s most recent projects include a 615,000-square-foot distribution center in Dallas, the acquisition of more than 400 acres of speculative land and 943 residential units.  

Image courtesy of Jones Development

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56 Commerce Center

The Opus Group has closed the first two leases at its recently completed industrial facility in Olathe, Kan., the second building within 56 Commerce Center. The tenants are Gateway Classic Cars and Lanter, two local companies which will occupy more than 85,000 square feet. Newmark Grubb Zimmer represented Gateway Classic Cars while Colliers International arranged the lease on behalf of Lanter.

For collectible and exotic automobile seller Gateway Classic Cars, the upcoming 38,500 square-foot showroom and storage space will represent its first location in the Kansas City area. The company occupies 900,000 square feet of showroom space in 18 markets in the country.

Lanter will occupy 48,500 square feet of space at 56 Commerce Center. The firm worked together with Opus to customize its logistics facility, adding an additional 30 truck stalls and expanded dock door count.

Increased demand for industrial space

“Coming off the heels of a successful first phase at 56 Commerce Center, this momentum demonstrates the strong demand for industrial space in the area,” said Joe Downs, vice president & general manager at Opus, in a prepared statement.

The industrial building was completed in May 2019 and encompasses a total of 230,000 square feet. It includes a 32-foot clear height, front parking lot and rear truck court with a potential for up to 35 stalls. The facility can be reached via interstates 35, 435 and 49. Opus was the developer, design-builder, architect and structural engineer of record on the project.

Joe Orscheln and Mike Mitchelson of CBRE marketed the property for lease, Mark Long at Newmark Grubb Zimmer, on behalf of Jackson Cooksey, represented Gateway Classic Cars and John Stafford at Colliers International represented Lanter.

In the summer of 2018, Opus broke ground on a mixed-use project in Overland Park, Kan., which is set to add 125,000 square feet of retail and office space to the downtown area. 

Image courtesy of The Opus Group

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6201 College Blvd.

Eye-care services provider Retina Associates has expanded its office at 6201 College Blvd. in Leawood, Kan. The company leased an additional 8,580 square feet on the second floor of Copaken Brooks’ asset, planning to begin occupancy in June. Senior Vice President Ryan Biery represented the landlord in-house while NAI Heartland’s Partner Mike Sonnenberg worked on behalf of the tenant.

The 145,215 square-foot office building is less than 10 miles from Retina Associates’ headquarters in Overland Park, Kan. Completed in 1989 for the NCAA National, the property sits seven floors high and provides 595 parking spaces. It features a granite and dark glass façade as well as a two-story landscaped atrium with underground utilities.

Major tenants include First National Bank of Kansas and Polsinelli. After Retina Associates’ lease, there were approximately 30,000 square feet of unoccupied space at the building.

The property can be accessed via Interstate 435. It is located across the street from Overland Park Convention Center and near other health-care facilities such as Children’s Mercy Hospital Kansas and MidAmerica Rehabilitation Hospital. Approximately 20 miles away, at 1828 Walnut St. in Kansas City, Copaken has been working on Phase II of the historic Thomas Corrigan Building.  

Image courtesy of Yardi Matrix  

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Prairie View Business Center

Haith & Co. has sold Prairie View Business Center, a 109,089-square-foot office campus in Kansas City, Mo., to Boyd Watterson Asset Management for $11.7 million. According to Yardi Matrix data, Haith and Co. owned the property since 2005, when it purchased the asset from Barings.

The property is located at 10320-10336 NW Prairie View Road, next to the Kansas City International Airport and just off Interstate 29. It comprises two one-story buildings, which were completed in 1993. The office center was almost entirely leased at the time of the sale to five tenants, including the U.S. Military Entrance Processing Station for Kansas City, which occupies approximately half of the rentable area.

The building is LEED certified and sits on a 12-acre site which includes a parking lot for up to 384 vehicles. In 2015, the property became subject to a $7.8 million loan held by Sunflower Bank.

Director Scott Briggs of Stan Johnson Co.’s Tulsa office represented both the buyer and the seller in the deal.

“With 82 percent of the property leased to the United States of America (…) and 94 percent of the rental income coming from the federal government, this was a very attractive asset,” said Briggs in a prepared statement.

In 2017, Boyd Watterson Asset Management acquired an office portfolio in Virginia for $13.2 million.

Image courtesy of Yardi Matrix

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Southlake, Kansas City

City+Ventures have purchased Southlake Portfolio, a collection of 11 Class A and B office buildings encompassing 784,557 square feet in the Kansas City metro area, for $88 million. 

JLL facilitated the sale and financing of the assets, with financing provided by Morgan Stanley. A fund managed by Oaktree Capital Management, Hines and Waterford Property Company sold the portfolio.

The Southlake Portfolio provides long-term stability with the recent lease commitment from University of Kansas Health System. The properties also offer upside through additional leasing, given the properties’ current occupancy level of approximately 80 percent.

Located 19 miles southwest of downtown Kansas City, the assets are close to major transportation routes, including Interstates 35 and 435. There are several dining and retail venues within a 4 mile radius of the properties.

JLL Capital Markets International Director Bruce Miller, Managing Directors Jim Postweiler and Peter Harwood, and Senior Vice President Derek Fohl led the sales and marketing efforts on behalf of the seller. JLL Managing Director Keith Largay arranged the acquisition financing for the buyer.

JLL recently appointed Nicole Zanghi as vice president of its agency leasing team in Silicon Valley, Calif.

Image via Google Maps

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StorageMart

StorageMart has expanded its footprint with an 80,000-net-rentable-square-foot self storage facility in Overland Park, Kan. This marks the company’s fourth location in the region and the 32^nd in Kansas City metro. The storage asset was developed by West Star Development in 2017, according to Yardi Matrix.

“We look forward to expanding our footprint in this growing community,” said Alex Burnam, senior acquisitions analyst at StorageMart, in prepared remarks. “This additional facility will serve to satisfy the demand for self storage in the Overland Park market, allowing us to continue providing best-in-class storage solutions for our customers throughout the area.”

Situated at 15415 Metcalf Ave., the facility is near Freeway 69, approximately 14 miles from downtown Overland Park and 24 miles from the center of Kansas City. The three-story storage asset occupies 1.6 acres and comprises 639 climate-controlled units, ranging from 25 to 400 square feet, Yardi Matrix data shows. Characteristics of the facility include indoor loading bays, video surveillance, keypad access and on-site office.

The firm’s latest acquisitions include Move It Storage, a 72,063-net-rentable-square-foot facility in San Antonio, Texas.

Image courtesy of StorageMart

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City Center Square

HFF has orchestrated $60.2 million in bridge financing for Somera Road Inc.’s purchase of City Center Square. The New York-based company purchased the approximately 657,000-square-foot office building in downtown Kansas City, Mo., from David Werner Real Estate in an off-market transaction.

TPG RE Finance Trust provided Somera with a floating-rate acquisition loan. “Lenders liked (City Center’s) attractive basis, the TOD location on a streetcar stop, in addition to the strong office market fundamentals coupled with the robust urban renewal and continued growth,” Leon McBroom, director with HFF, told Commercial Property Executive.

City Center Square sits at 1100 Main St. in Kansas City’s central business district, occupying an entire city block. The 30-story tower, which first opened its doors in 1977, also features 30,000 square feet of ground-level retail space.

The new owner plans to use proceeds from the loan to rebrand and reposition the property. “This is a rare opportunity to completely renovate a building into a trophy office tower in a downtown Kansas City market that is currently experiencing a resurgence,” McBroom added.

McBroom was joined in representing the borrower by fellow debt placement team member Mark Katz, a senior managing director with HFF.

Kansas City attraction

Kansas City’s office market continues on an upswing. Vacancy rates hovered at record lows and rental rates rose 3 percent in 2018, according to a report by commercial real estate services firm Newmark Knight Frank. The fourth quarter of 2018 marked the 21st consecutive quarter of increased asking rental rates. The positive fundamentals remain a magnet for investors.

“Capital is really buying into the downtown Kansas City resurgence, and that includes lenders,” said McBroom.

Image courtesy of HFF

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Rendering of KC3

DataBank has completed a new facility in Lenexa, Kan., a suburb of Kansas City, Mo. The Tier III KC3 is the company’s third such deployment in the area, complementing the existing capacity at its South Lake Data Center Campus. The newly constructed building will be the essential component in DataBank’s interconnected campus.

The South Lake Campus is similar in design to DataBank’s recently constructed data center in Dallas-Fort Worth since it comprises separate facilities all interconnected by dark fiber. KC3 will provide clients with cloud and colocation solutions, as well as access to DataBank’s CloudPlus5 computing and storage platform, which delivers hybrid cloud capabilities to enterprise clients. The secure private-public cloud infrastructure, combined with on-premise colocation, is made possible via DataBank’s partnership with Megaport.

KC3, at 25,000 square feet of raised floor, offers an initial 3 megawatts of critical IT power during the first phase of deployment. Following customer demand, the facility can be expanded up to 106,350 square feet and a total of 8 megawatts. Additionally, the data center is equipped with high-density computing capabilities, 2N UPS configuration, fully redundant automatic transfer switch and robust physical security features, such as monitored security cameras, dual-factor authentication and on-site personnel.

Rendering courtesy of DataBank

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Northland Innovation Campus

Northland Innovation Campus, a Class A office building located north of Downtown Kansas City, has changed hands. Miami-based KCP Acquisition purchased the 90,000-square-foot asset from Gladstone Capital. CBRE Capital Markets’ Institutional Properties arranged the transaction on behalf of the seller.

According CBRE Vice Chair Gary Carr, in a prepared statement, the new buyer was attracted by the building’s “long-term stabilized cash flow with an average remaining lease term of nearly 15 years.” 

The five-story property was completed in 2016 at 6889 N. Oak Trafficway and according to Yardi Matrix data, is 92 percent leased to the North Kansas City School District, Northwest Missouri State University and Edward Jones. The property features collaborative office space, high-tech infrastructure and a fabrication lab located on the lower level. Situated approximately 10 miles from downtown Kansas City and 15 miles from Kansas City International Airport, the campus can be reached via interstates 29 and 35.

Carr’s team on the deal also included First Vice Presidents Gina Anderson and Robert Hill.

Image via Google Street View

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Rob Welker, partner & president, Hoefer Wysocki

Over the past decade, urban core development has been making a comeback, as Millennials prefer renting close to lifestyle amenities rather than settle in bedroom communities. But that doesn’t mean that the popularity of the suburbs has come to an end, as mixed-use developments are successfully transforming outlying districts. Innovative development trends such as placemaking bring together urban elements from the residential, retail, entertainment, office and hospitality sectors alike in unusual places, becoming focal points to communities.

Rob Welker, partner & president of architecture firm Hoefer Wysocki, has an extensive history in mixed-use projects. In the interview below, Welker talks about the increasing number of such developments in the Midwest and South, and how they are bringing the urban feel to the suburbs. He also sheds light on what sets a project apart as developers integrate more and more tech into their buildings.

What are the factors behind this wave of mixed-use developments in suburban areas?

Welker: Young housing buyers are taking a more critical look at long-term mortgage commitment, as the recession eroded consumer confidence in the economy. Many Millennials have chosen the luxury rental alternative rather than purchasing a home. This choice has coincided with several other trends within the multifamily industry, including the cost of new housing and the provision of smaller, more highly amenitized housing provided by builders and developers.

Why do you think we are seeing so many suburban mixed-use projects in the Midwest and South?

Welker: The growth of suburban development continues its expansion despite a back-to-the-city trend seen in many urban areas. Urban redevelopment can only accommodate a small percentage of growth because of the lack of available infill land and the cost of its regeneration. Where suburban pricing is more expensive, developers need to increase project yield, diversified market offerings and increase absorption through mixed-use. This dynamic promotes the development of mixed-use, thereby reducing the land cost per unit. These economic factors combined with Millennial demand for more innovative places create an opportunity for mixed-use growth.

Another trend that is influencing suburban mixed-use is the creation of new jobs in our current cycle. Office development similarly seeks more affordable options of suburban development and follows the talent base.

Which are some of the most popular uses we find in modern mixed-use projects?

Welker: In urban areas, alternative uses and lifestyle preferences are inherently provided in the existing community. Choice is provided by the existing community fabric and social infrastructure. Suburban development often needs to create these alternative uses unless the project is an infill in an existing suburban center.

In larger suburban mixed-use developments, the mixed-use component can be driven by a variety of regional generators such as sports and entertainment, civic and cultural, or employment centers. Major corporations are redefining the company town concept. Corporate-centered development is being reimagined as vertical mixed-use and is urbanized by density and a full range of lifestyle choices that support the live-work-play aspect. Mixed-use is the new manifestation of the corporate campus, which caters to employees’ preference for convenient access to lifestyle amenities.

In the absence of corporate anchors, mixed-use is required to provide a critical mass of lifestyle choices that combine entertainment and recreation to support the residential component. Unlike their material-driven Boomer parents, today’s young consumer values experience and connections, whether it be provided within the living unit or in the public realm. In retail, co-branding and the integration of online and brick-and-mortar extends the brand into the daily routine of Millennials and their expectations of lifestyle.

What are the challenges of designing mixed-use projects?

Welker: From a developer’s perspective, the biggest challenge for mixed-use is providing a sensible balance of parking and leasable space, maintaining flexibility in the masterplan, developing a layout that evolves with the market and the ability to re-tenant space.

From the consumer’s perspective, it is finding a place that is distinctive and provides a variety of services and experiences that are meaningful enough to engage them for hours at time and that is in proximity to other areas they frequent. For the tenant, it’s about visibility, foot traffic, critical mass of complementary tenants, access to and alignment with target customers and parking.

How do you see the mixed-use trend going forward?

Welker: Mixed-use has gained a relevant place in the market because the industry now knows how to finance, deliver and manage it. The beauty of mixed-use is that it can take many different forms in response to local demand. The challenge is to not oversaturate the market.

Mixed-use will be affected by trends and technologies in other sectors. The most obvious is the change in autonomous vehicles. We are now at the cusp of creating highly energy-efficient and potentially zero-net energy districts that may leverage these vehicles and new building technologies and materials as generators. What will follow is the integration of financing of communication and energy infrastructures into the traditional real estate investment model.

Big data and communications are transforming the delivery of preventive health care and wellness to the home and office. These advances are likely to take root in new mixed-use developments as backbone technology infrastructure will carry new market opportunities. No matter what the future holds for these advancements, building places that relate to human needs and imagination is critical in differentiating sustainable and resilient mixed-use projects.

What relevant projects illustrate these trends?

Welker: Several large-scale, sports-branded mixed-use entertainment districts across the country have been built or are on the docket. What started decades ago in Baltimore with Camden Yards has now evolved into the leveraging of corporate brands into the physical marketplace. The Star in Frisco, Texas, is a physical incarnation of the Dallas Cowboys brand. City Place in Santa Clara, Calif., will transform the San Francisco 49ers into the modern-day equivalent of a small city. Hoefer Wysocki is currently working on the masterplan for the NRG Park and adjoining properties that combine the Houston Texans and Houston Rodeo brands into a major mixed-use project. Corporate brands leverage real estate and vice versa.

The Star – Frisco

At the other end of the spectrum, projects in the U.S. and Europe have successfully integrated evolving technologies into energy and innovation districts that seek to capture cutting-edge infrastructure as their differentiator. The 10-acre master-planned Kendall Square in Cambridge, Mass., for example, combines the MIT, Boeing and other high tech-innovator brands into an energy and innovation platform for mixed-use to align with.

You are currently working on the redevelopment of the Old Kansas City Mill. What makes this project stand out?

Welker: What was once home to a decommissioned grain elevator is now the site of a massive new mixed-use development—One North—sited north of downtown Kansas City. The project is a significant public-private-partnership with the City of North Kansas City, which offered incentives to developers.

In addition to market-rate apartments, the new 56-acre mixed-use development will feature 350 market-rate apartments, two hotels, dining, retail, a golf range and a 16,000-square-foot grocery store. Anchored by retailer Meierotto, the local jeweler recently expanded into the development with a new 34,000-square-foot, three-story showroom and offices. With direct interstate/highway access, the One North development is adjacent to established neighborhoods in the city’s historic Northeast—River Market, now booming with multifamily development, and the East and West Bottoms.

Aloft-Element Hotel

Hoefer Wysocki is working with KMG Hotels to design the new co-branded Aloft and Element hotels, which will serve the One North development. The 200-room hotel development includes the 5,000-square-foot Diamond Conference Center which accommodates 250 to 300 guests.

In what development stage is the project in and what is the timeframe for completion?

Welker: The hotel project is currently in final design and nearing construction, with an occupancy date set for 2019.

Do you have any other mixed-use projects in the Kansas City area on the drawing board? 

Welker: We are working on several mixed-use projects in the Kansas City area. CityPlace, sited in a suburban corridor in central Overland Park, Kansas City, is an example of suburban urbanism. The development integrates multiple building types with varying levels of density with landscaped parks and trails that wind through the apartment community and link to the Indian Creek Bike and Hike Trail System. Apex at CityPlace is the 460,000-square-foot, 370-unit multifamily component that serves as the centerpiece of the development. The building is serviced by structured parking in a podium configuration. State-of-the-art technology throughout the facility caters to those who work from home.

Situated in historic downtown Overland Park, The Vue was developed in a prime infill site in the heart of the Vision Metcalf Corridor Plan. Downtown Overland Park is governed by a form-based code, which is less specific regarding esthetic criteria, but very specific regarding materiality, density, parking, setbacks and use. The Hoefer Wysocki design team worked with the city planning department and the development team.

The Vision Metcalf Plan was established to guide development of what the city anticipated would be a burgeoning area of reuse and revitalization. The city is unwavering in the corridor plan’s implementation to ensure that density, pedestrian and vehicular circulation and walkability requirements are met. The result: The Vue, a 285,720-square-foot, 219-unit apartment complex. The building is supported by structured and on-street parking and pedestrian-friendly circulation. The project also provides 10,000 square feet of retail and restaurants with outdoor dining. Amenities include a community kitchen and dining area, a game room, internet café and cyber lounge.

Image courtesy of Hoefer Wysocki

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The Plano, Texas, data center campus

Lincoln Rackhouse, the data center division of Lincoln Property Co., has hired CBRE to manage a 1 million-square-foot data center portfolio that spans three states. The company acquired the portfolio together with Principal Real Estate Investors earlier this year from a Fortune 500 entity, which leased back some of the inventory.

CBRE’s Data Center Solutions team will be responsible for day-to-day operations, maintenance and capital projects at the newly acquired facilities. The portfolio comprises three campuses situated in Kansas City, Mo., Dallas and Phoenix. The data centers have a combined IT power capacity of 28 megawatts, with expansions ready for deployment according to demand.

All three facilities are wholesale data centers. Previous ownership invested approximately $200 million to upgrade and renovate the campuses. Lincoln Rackhouse is planning to pour more funds into further improvements and retrofitting the data centers for multi-tenant use.

Top market presence

The regions where Lincoln Rackhouse expanded its operations are all premier data center markets in their own way. Dallas-Fort Worth is currently the second largest market in the U.S. by available inventory—around 268 megawatts are deployed in the region, according to CBRE’s Data Center Trends Report H1 2018. The campus is in the Dallas suburb of Plano and currently has 8 megawatts immediately available, with potential expansion to 16 megawatts.

The Phoenix data center market is growing at a quick pace, with many investors currently deploying raised floor space in the region. According to the same source, there are currently more than 61 megawatts of data center space under construction. The Lincoln-Principal joint venture’s newly acquired campus has a 10-megawatt capacity, which, together with a redundant substation of 21.6 megawatts, was fully leased by Internap Corp. immediately after the transaction.

“As for Kansas City, we now own the largest block of data center space currently available in the market, which historically has seen more data center development directly by the enterprise, due to a lack of large-scale wholesale data center offerings,” said Ryan Crabtree, vice president of asset management and property operations at Lincoln Rackhouse, in a prepared statement. The Kansas City campus is a two-building data center that totals 259,111 square feet and delivers up to 10 megawatts of critical power.

Image courtesy of Lincoln Rackhouse

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De Soto KS Self-Storage

CKC Holdings LLC has traded De Soto KS Self-Storage, a self-storage facility in De Soto, Kan., with 41,555 rentable square feet. Bellomy & Co. represented the seller and procured the buyer, a Missouri-based investor.

Situated at 9520 Lexington Ave., the asset occupies more than 3 acres near Freeway 10, approximately 31 miles from downtown Kansas City and 17 miles from the city of Lawrence, which hosts University of Kansas. Additionally, Overland Park, the second most populous city of Kansas, is situated 19 miles from the facility. The four-building storage asset was built in 2007 and expanded in 2015. It encompasses 331 units, ranging from 25–480 square feet. Features of the facility include climate control, drive-up access, security cameras and parking. Additional services include on-site management and 24-hour access.

Bellomy & Co.’s brokerage team included Principals Bill Bellomy and Michael Johnson. Earlier this month, the company facilitated the sale of Cornerstone Storage, a 433-unit self-storage asset in Omaha, Neb.

Image courtesy of Bellomy & Co. 

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The property is located near the Burlington Northern Santa Fe railway as well in a densely industrial area, home to the warehouses of Riverside Transport, Virginia Tile, Metro Park Warehouses and other firms.

Managing Director John Hassler and Executive Managing Director Mark Long of Newmark Grubb Zimmer and BH Properties’ Bill Hardy arranged the deal on behalf of the landlord. Principal & Senior Vice President Luke Burbank and Co-Founder & Executive Vice President Kyle Roberts from Newmark Grubb ACRES represented the tenant.

The transaction highlights a trend which puts secondary markets like Kansas City in the spotlight for attracting industrial tenants. While most gateway markets in the Midwest, such as Chicago and Minneapolis, have very low vacancy rates, online retailers are being drawn to cities like Kansas City which can easily link them with the rest of the nation.

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11155 NW Airworld Drive

A joint venture between Lincoln Rackhouse and Principal Real Estate Investors has acquired a data center portfolio totaling one million square feet throughout facilities in Dallas, Phoenix and Kansas City, Mo. 

The portfolio includes 1000 Coit Road in Plano, a two-story asset offering 454,421 square feet on 23.8 acres; 11155 NW Airworld Drive in Kansas City, a two-building campus offering 259,111 square feet on nearly 17 acres; and 2500 W. Fry in Phoenix, a 191,061-square-foot data center and on-site substation on 24.4 acres. With power capacity, the Plano facility has 8MW available to lease, which can be expanded to 16MW. The availability includes 60,000 square feet of raised-floor space and an expansion capability of 125,000 square feet. The Kansas City facility has 10MW of power capacity and 100,000 square feet of raised-floor space available for occupancy. 

“This acquisition doubles our portfolio and allows us to offer cloud, colocation and managed services providers attractive expansion or new entry options into these key data center markets,” said Ryan Sullivan, managing director of Lincoln Rackhouse, in a prepared statement. “We were able to acquire this portfolio because we were patient, flexible and have a proven track record of performance with the seller.”

In addition to the acquisition, the partners have signed a master lease with INAP, a cloud and colocation provider, which occupies Phoenix’s entire 10MW of power capacity and substation with redundant 21.6MW utility transformers. The entire portfolio has undergone $200 million in upgrades over the last few years by the seller, who was represented by CBRE. The buyers are planning to put additional funds into upgrading and retrofitting the facilities for multi-tenant use. 

In June, a joint venture between Principal Real Estate Investors and Panattoni Development Co. broke ground on a 232,000-square-foot industrial development on the border of Placentia and Anaheim, Calif. 

Image courtesy of Lincoln Rackhouse

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Edison District

The Opus Group and developing company OPRE have broken ground on a 125,000-square-foot mixed-use project in Overland Park, Kan. The planned Edison District will encompass a five-story building providing office and retail space, an outdoor event plaza and a 4.5-level parking garage accommodating up to 400 vehicles. The new development is scheduled for completion in the fall of 2019.

The Class A building will be located at the southwest corner of 80^th and Marty streets, less than 10 miles from the CityPlace Corporate Center, where Mediware is building its new headquarters. Project plans also include a first-floor food hall featuring a coffee shop and Asian-inspired cuisine. The office space on the second floor will be occupied by Edison Spaces, while the third, fourth and fifth floors will provide speculative office space. A skyway on the second floor will connect the parking garage and the building.

This is the second time The Opus Group partners with developer Tim Barton of OPRE. The two companies worked together in 2013 at the headquarters of shipping services firm Freightquote. In addition to the two developers, OPRE and Opus Development Co., the team behind the project also includes Opus Design Build as the design builder and Opus AE Group, the interior designer, architect and structural engineer of record. AREA Real Estate Advisors will be in charge of marketing the office space for lease.

Image courtesy of The Opus Group

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2345 Grand Blvd.

Lingerfelt CommonWealth Partners has made its entrée into the Kansas City, Mo., market. In a joint venture with CrossHarbor Capital Partners, the commercial real estate investment firm recently acquired the approximately 538,700-square-foot office building at 2345 Grand Blvd. from Franklin Street Properties Corp.

The purchase marks a departure from Lingerfelt CommonWealth’s core regions: the Mid-Atlantic and Southeast. Additional details on the transaction are not being released due to certain restrictions, a company spokesperson told Commercial Property Executive.

“We are enthusiastic about entering the Kansas City market at this time and we are particularly excited to own such an iconic building in this prime location,” Brian Witthoefft, managing director of leasing and marketing with Lingerfelt CommonWealth Partners, said in a prepared statement. “The market fundamentals continue to strengthen, showing steady leasing demand, positive space absorption in quality properties, and upward pressure on rental rates metro-wide.” 

Developed in 1977 by the Shorenstein Co., the Mies van der Rohe-designed 2345 Grand sits in Kansas City’s Crown Center submarket downtown. The 28-story building is currently 73 percent occupied by multiple tenants, including law firm Lathrop & Gage, which inked an approximately 111,000-square foot lease renewal in 2016. The transaction also included the four-story annex building at 2380 McGee St., designed by Mies van der Rohe as well.

Lingerfelt CommonWealth, which will serve as operator of 2345 Grand, plans to submit the Class A property to a substantial renovation program that will include the reconfiguration and upgrading of the ground-level retail space at 2380 McGee. Joint venture partner Commonwealth Commercial will take on the role of property manager. Commercial real estate services firm Cushman & Wakefield has been tapped to spearhead leasing and marketing activity.

Portfolio boosting

Lingerfelt CommonWealth has been active in both the office and hospitality sectors over the last several months. In a joint venture with JDI Realty, the company recently purchased Virginia Beach Resort Hotel & Conference Center in Virginia Beach, Va.

Also on the list of acquisitions are the 78,500-square-foot Buschwood III office building at 3350 Buschwood Park Drive in Tampa, Fla., and the 405-key Norfolk Waterside Marriott in Norfolk, Va.

Image courtesy of Lingerfelt CommonWealth

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Jim Koman, managing principal, ElmTree Funds (Image courtesy of ElmTree Funds)

ElmTree Funds, a St. Louis-based real estate private equity firm and fund manager, has expanded its portfolio by more than 2 million square feet through acquiring six fully leased single-tenant properties in Alabama, Michigan, Missouri and South Carolina. The firm spent approximately $300 million on the assets, which consisted of three office, two industrial and one health-care properties.

“We continue to identify compelling net lease acquisition opportunities and seek transactions in the marketplace,” Jim Koman, managing principal at ElmTree Funds, said in a prepared statement. “These transactions represent ideal purchases for us as the properties are located in fundamentally strong markets with tenants under long-term leases.”

Jacobs Building (Image courtesy of Yardi Matrix)

The largest of the properties is a 1.2 million-square-foot build-to-suit industrial property located in the Southwest leased to a confidential investment-grade tenant. Another highlight is a 375,466-square-foot build-to-suit industrial development in Valley, Ala., leased to WestRock Co., a paper and packaging company.

The largest of the office assets acquired is a 210,126-square-foot property leased to Jacobs Engineering Group Inc. in Greenville, S.C. The two- to three-story building is located at 1041 East Butler Road on 22.5 acres and was sold by The Simpson Org. to ElmTree, according to Yardi Matrix data. Built in 1990, the asset previously traded in August 2014, when Highwoods Properties sold it to The Simpson Org. for $20.1 million, the data provider shows.

The other assets are:

• a 115,000-square-foot build-to-suit office property in Detroit leased to Hella KGaA Hueck & Co., a German automotive parts supplier;
• a 100,000-square-foot build-to-suit property in metro Detroit leased to Tenneco Inc., a global supplier of ride performance and clean air products and systems;
• a 15,720-square-foot build-to-suit health-care property in Kansas City, Mo., leased to Baxalta Inc., a biopharmaceutical company.

Growing portfolio

Since its founding in 2011, ElmTree has acquired, developed or financed more than $6 billion in office, industrial and health-care properties. The firm targets investments in secondary and tertiary markets in the U.S. leased to investment-grade tenants on a long-term basis.

Nearly a year ago, ElmTree sold a portfolio to IRA Capital Advisors for $127.5 million, encompassing three industrial facilities—including one in Florence, Ky., leased to Smithfield Inc.—two office properties and a health-care asset.

In May 2017, the firm recapitalized its ElmTree Net Lease Fund 11 portfolio with a $950 million investment from a wholly owned subsidiary of China Life Insurance Group, one of China’s largest insurance corporations. China Life bought a 95 percent stake in the 5.5 million-square-foot portfolio, which had 48 single-tenant assets across 20 states, comprised of 56 percent industrial, 29 percent office and 15 percent health-care properties when the transaction was completed.

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2925 Industrial

JLL has facilitated the sale of 2925 Industrial, a 139,077-square-foot multi-temperature mixed-use property in Junction City, Kan. The 2006-built industrial facility was sold by SpartanNash, which acquired the asset back in 2014. The sale includes a 34,800-square-foot cooler-freezer storage area, as well as 19.8 acres of land suitable for expansion.

Located at 2925 Industrial St., the property offers strategic distribution towards metro areas such as Kansas City, Oklahoma City, Denver, St. Louis and Chicago. The asset is close to Interstate 70, and Interstates 135, 335 and 35 are all within an hour’s drive. The property features 30 feet clear height, 30 loading docks, one grade-level door and 102 parking spaces.   

JLL Senior Vice President Chuck Rosien led the sales team that closed on the sale. Recently, JLL has brokered the leasing of a 107,000-square-foot industrial facility within World Houston Business Park.

“With the right strategic improvements, the property will grow along with the areas it’ll serve, increasing the quality of service and ultimately the revenue of the new operator,” said Rosien, in a prepared statement.

Image courtesy of JLL

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Kansas City University of Medicine and Biosciences has broken ground on a new Center for Medical Education Innovation (CMEI). JE Dunn will serve as the general contractor for construction. The $33 million facility will provide virtual reality and haptic technology, simulated clinical experiences for educating the next generation of physicians and health sciences professionals.

CMEI will be located at 1750 Independence Ave., on the university campus. The building will offer a total of 56,000 square feet divided on four levels, including nearly 13,000 square feet of classroom space and an advanced physical diagnosis and Osteopathic Manipulation Medicine. The center will also feature standardized patient rooms, high-fidelity simulation rooms, a skills simulation deck that utilizes virtual reality and haptic technologies, and a simulation command center.

Designed by Helix Architecture + Design and CO Architects, the facility will serve as a resource for students and health-care professionals throughout the region, offering opportunities for continuing medical education, inter-professional education and active research in academic collaboration.

Video courtesy of KCU

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As Kansas City is transforming into a business-oriented Midwestern city, the demand for new office stock, one type of property the metro area has been lagging in, has also been increasing. Developers have been trying to balance supply and demand and, as a result, roughly 1 million square feet of new space were added in the 12 months ending in April.

New projects were mostly concentrated in Overland Park and its dynamic College Boulevard corridor, the epicenter for the city’s health care sector. Four of the largest office assets that have come online during the last four quarters were located in this area. Developers preferred the submarket especially due to its proximity to Interstate 435 and the availability of large construction sites.

Core submarkets were less popular with builders as employers continue to be put off by limited office inventory, outdated buildings and security issues. The silver lining for Kansas City’s downtown core, however, is the rise of the coworking office trend. They usually take smaller, older buildings and transform them into modern collaborative spaces attracting startups and young professionals. A recent project developed by The Cordish Cos. is an example of how important live-play-work communities are for revitalizing downtown Kansas City.

The list presents the eight office projects completed in the city’s greater area during the last 12 months. The information regarding owners, square footage and loans is based on data provided by Yardi Matrix.

8. Terracon Headquarters (Olathe)

10841 Ridgeview Road (image courtesy of Google Street View)

In April 2017, Terracon announced its plans to move to a new $21 million corporate headquarters located not too far from its current office near Kansas Highway 10 and Ridgeview Road. The 62,500-square-foot, two-story office building at 10841 S. Ridgeview Road in Olathe is expected to house approximately 200 employees. The site occupies 12.8 acres, leaving enough space for a future expansion of up to 60,000 square feet. According to developer VanTrust Real Estate, the Terracon headquarters features a private balcony, an outdoor patio and a pond, as well as a 280-space parking lot. The architect was Finkle+Williams and the contractor was McCown Gordon Construction.

7. Shawnee Mission Health at Blue Valley I (Overland Park)

SMH’s new Blue Valley campus located at 7820 165th Plaza in Overland Park was designed as a network of health-care facilities including an emergency department, imaging center, a SportsCare wing and laboratory. The site spans 26.2 acres. Terracon, tapped by SMH to develop the campus, completed Phase I of the project in the first quarter of 2017. The facility totals 75,000 square feet spanning three floors. General contractor GE Johnson, Henderson Engineers Inc., ACI Boland Architects, Olsson Associates and Bob D. Campbell & Co. were also part of the team of specialists that delivered the new building.

6. Quad Six (Overland Park)

6650 W. 110th St. (image courtesy of Google Street View)

The College Boulevard submarket, one of the most dynamic business corridors in the Kansas City area, has added several new office projects in the last 12 months. One of them is Quad Six, a 76,195-square-foot, three-story medical office building located at 6650 W. 110th St. along the south side of Interstate 435. Diagnostic Imaging Center is one of the tenants, having signed a lease for approximately 42,000 square feet last year. Van Trust Real Estate delivered the building in the summer of 2017.

5. Roe Medical Center I (Overland Park)

Not far from Quad Six is another medical office building—Roe Medical Center I. Developed by Block Real Estate Services, the three-story asset represents Phase I of the medical campus underway at 5100 W. 110th St. It incorporates 78,368 square feet and features a 360-space parking lot, as well as convenient access via Interstate 435. The property is subject to a $17.8 million construction loan originated by Commerce Bank.

4. 6601 College Blvd. (Overland Park)

6601 College Blvd. (image courtesy of Google Street View)

Tower Properties, the owner of the 101,241-square-foot office building at 6601 College Blvd. for the past two decades, announced that it was going to upgrade the property back in 2015. At that time, the asset was leased to Black & Veatch, which had to relocate its employees to Overland Park Xchange. To give the building a new uplift, Tower Properties paired up with Kansas City’s Helix Architecture + Design, spending $20 million on improvements such as a full glass façade, theater room featuring a 130-inch multimedia screen, brew house with Starbucks coffee machine, treadmill desks and rocking chairs among other things. Three quarters of the total construction cost came in the form of a loan originated by Carrollton Bank. After its early 2017 delivery, part of the building was leased to DEG.

3. Nall Corporate Center II (Overland Park)

Located at 5700 W. 112th St., at the corner of College Boulevard and Nall Avenue is Nall Corporate Center II, a five-story, 150,000-square-foot office building which Block Development Co. Inc. delivered in February 2017. The property incorporates a 670-space parking lot, features a reflective low E glass façade and is registered for LEED certification. To complete the asset, Block Real Estate Services reached out for a $69.2 million 10-year loan from BOK Financial. Two year later, at the beginning of 2017, the company contracted another loan of $26.2 million from Security Bank of Kansas City.

2. Dairy Farmers of America Headquarters (Kansas City)

1405 N. 98th St. (image courtesy of Google Street View)

In April 2017, Kansas City’s largest private company moved its headquarters from the Missouri part to the Kansas side of the city, thus benefiting from the PEAK program that Kansas City launched in order to attract employers to Kansas. The new energy-efficient office asset cost its owners $35 million—a purchase the company funded through a Wells Fargo loan—and features glass panel exterior, a fitness center with an on-site trainer and a milk bar, among other perks. The three-story, 154,000-square-foot development is located at 1405 N. 98th St. in Wyandotte County and was designed by HOK architects.

1. Westport Commons Plexpod (Kansas City)

300 E. 39th St. (image courtesy of Yardi Matrix)

The massive coworking space developed for Plexpod at 300 E. 39th St. in Kansas City’s Midtown-Westport submarket was delivered in the summer of 2017. The owner, Kansas City Sustainable Development Partners, incorporated the Westport Middle School into the first building of the planned campus. The new 160,000-square-foot asset features several event spaces where the school’s historic theater and girls’ gym used to be as well as two rooftop decks. In addition, the asset is registered for LEED Gold certification.

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Paul Licausi, TCN Worldwide

TCN Worldwide has appointed industry veteran Paul Licausi as central regional vice president. In his new role, Licausi will serve as advisor to the member firms located in his region and will act as a liaison with TCN Worldwide corporate headquarters.

Licausi is an experienced commercial real estate professional with more than 30 years of activity in the field. Besides his appointment at TCN Worldwide, he is also founder & president of LS Commercial Real Estate and president of LS Construction Services Inc. He has experience in brokerage, management, sale and lease transactions, and commercial property development—he has worked on the development of more than 5 million square feet of commercial assets nationwide, with an aggregate value of more than $175 million.

Licausi is active in several real estate and development-related organizations and councils, including the Kansas City SmartPort board of directors, Southwest Johnson County Economic Development, National Association of Industrial and Office Properties, NAIOP Forum Development Group Board, Kansas City Area Development Council, and Commercial Real Estate Council.

Image courtesy of TCN Worldwide

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11300 Corporate Avenue

Hines, in a joint venture with a fund managed by Oaktree Capital Management LP, has announced that The University of Kansas Health System has signed a lease for a 105,000-square-foot office space at 11300 Corporate Ave. in Lenexa, Kan. The space is used for support operations for the health system.

Located within the Southlake Technology Park, the Midwest office property consists of a four-story building that is now fully leased to the university. Back in 2016, the health system agreed to lease 67,000 square feet of the total of 172,000-square-foot building. The office property offers floorplates ranging from 22,434 to 43,849 square feet, dual electrical feeds/separate substations, energy management system and back-up generator, redundant fiber and approximately 650 parking spaces.

Multi-building portfolio

Built in 1990, the office property is part of a 13-building Southlake portfolio and totaling more than 850,000 square feet of office space. In 2016, Hines completed a renovation of the building lobby and common areas, as well as landscaping, signage and various upgrades.

“This new location will allow for greater efficiency of operations, as well as provide us with the space and accessibility needed for us to achieve more optimal outcomes for patients,” John McDonough, vice president of facilities services and real estate development for The University of Kansas Health System, said in prepared remarks.   

Senior Vice President Bob Fagan and Vice President Matt Eckert in CBRE’s Kansas City office represented the health system in the transaction. Ned O’Connor from Waterford Property Company LLC represented the ownership.

Image courtesy of Waterford Property Co.           

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Country Inn & Suites by Radisson in Lawrence, Kan.

The Country Inn & Suites by Radisson has opened a new 89-key property in Lawrence, Kan. The owner of the hotel in eastern Kansas, a legal entity affiliated with Diamond Everley Roofing Contractors, kicked off the building’s development in early 2017. Apex Engineers provided engineering services, and Heinen Custom Operations acted as general contractor.

Located at 2176 E. 23rd St., the hotel is situated approximately three and a half miles from the University of Kansas, with the Haskell Indian Nations University positioned two miles to the west. In the past, an antique dealer and a steakhouse operated on the 1.2-acre parcel.

Hotel amenities include a 24-hour business center, a fitness center, an indoor swimming pool and complimentary breakfast and Wi-Fi. Laundry facilities are available to guests at an additional charge, and free on-site parking is provided. The building also features conference space which is equipped to accommodate 70 people.

Image courtesy of Country Inn & Suites by Radisson

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Laird Goldsborough

The Midwest area is one of the best-performing regions in the country. Secondary markets have begun to shine lately, especially because their development scene is particularly active in the large industrial distribution area. The commercial real estate market, however, is a very different matter.

Retailers continue to announce layoffs in the traditional sector, but some of these jobs are shifting towards e-commerce. This has pushed demand for distribution space and warehouses. According to a Newmark Grubb Zimmer fall report from last year, e-commerce jobs have increased a stunning 334 percent during the last 15 years. Amazon has recently signed long-term industrial leases and announced large distribution center projects in Midwestern markets such as Kansas City and St. Louis, Mo.

Valbridge Property Advisors President Laird Goldsborough, a state-certified general appraiser in Kansas and Missouri, thinks that big-box outlets and enclosed malls will continue to struggle as point-to-point and almost-immediate delivery become the norm. Goldsborough expects a slowdown in new development over the next two years, as pricing is historically rich and other forms of investment are becoming more attractive. He discussed with Commercial Property Executive how e-commerce continues to influence commercial real estate investments and the likeliness of a new bubble in the next few years.  

Which areas of the Midwest are most active when talking about the commercial real estate sector?

Goldsborough: Capital has historically been drawn to the larger Midwestern cities such as Chicago and Minneapolis. Primary markets have greater economic diversity when compared to smaller, secondary and tertiary markets. Diversified markets are less susceptible to new development and economic downturns and have greater space demand, which results in reduced risk to real estate investors. Cities that have a more varied workforce are less impacted by the highs and lows of real estate cycles. Larger markets also tend to attract higher quality employees making them an ideal place for businesses to locate.

As yields have become compressed in most gateway markets capital has started to flow to secondary markets such as Kansas City, Mo.; Detroit and Columbus, Ohio. As we continue through the current cycle, investments will continue to be attracted to deals that offer the most attractive risk-adjusted return, which is currently occurring in the multifamily and industrial spaces. Minneapolis-St. Paul is widely considered the leading Midwest metro in terms of commercial real estate demand. According to the Urban Land Institute’s Emerging Trends in Real Estate 2018 report, other Midwest cities with an above average outlook include: Indianapolis, Des Moines, Iowa, and Madison, Wis.  

The expenses associated with operating large enclosed malls and the shift in consumer tastes toward online shopping and open-air shopping centers have led to hardships. What’s the situation in secondary markets such as Kansas City? 

Goldsborough: In Kansas City there are only two large enclosed malls remaining and each of them are facing challenges. The Independence Mall on the east side of the metropolitan area was originally developed in 1974 and it was reportedly headed toward foreclosure in February 2018. Oak Park Mall, located in Overland Park, recently suffered a setback with the announcement of Nordstrom’s departure for the Plaza shopping area. This move will not happen for a couple of years, so some repositioning of this area of the mall may happen and there is a little time to figure that out. 

Other large indoor malls have been demolished—the Great Mall of the Plains in Olathe and Bannister Mall in Kansas City—and these areas are being redeveloped. Bannister has become the location of the Cerner Innovation Campus that will eventually house 16,000 employees, while the Great Mall site is currently seeking STAR bonds for redevelopment into a tourist entertainment and shopping area.

What is going to happen with former big-box and junior-box buildings?

Goldsborough: Big-box and junior-box buildings will be among the commercial building types that have slightly higher vacancy, but they will get absorbed by users that may put them to another type of retail use. In some cases, they will be repurposed for uses such as office, warehouse with showrooms, churches, or schools. Several former grocery stores have been converted to self-storage, while others have been repurposed into furniture showrooms. I do not expect vacancies for these buildings to be significantly higher than other classes of retail, as long as they are in attractive locations and their highest and best uses have not changed as the result of external factors.

The Kansas City development scene is very active, particularly in the large industrial distribution area. What is driving all this activity?

Laird Goldsborough: The logistics of Kansas City make it an ideal hub for distribution. The intersection of two major interstates—70 and 35—allow for easy access to most major cities in the U.S. The central location and lower cost of doing business help Kansas City standout as an attractive location for a distribution facility.

As online retail sales continue to grow and the demand for same day and two-day shipping increase, Kansas City is positioned favorably among other competing Midwestern cities. The Kansas City area has seven connected interstate highways and has the highest number of highway lanes per capita of any major city in the country. Overall, Kansas City is within a one day truck drive of virtually every major Midwestern market and a two day truck drive of 78 percent of the population of the U.S. Additionally, Kansas City is the second largest rail hub in the country, trailing only Chicago in terms of total freight cars per year. There are five Class 1 railroads headquartered in the U.S. and four of these railroads pass through the Kansas City area and so does the Canadian Pacific Railroad, the second largest railroad company in Canada.

Development of large distribution facilities remains active, primarily due to the ongoing shift in consumer spending habits, coupled with the region’s centralized location, robust distribution infrastructure and multiple large intermodal railroad operations. Kansas City’s centralized location and infrastructure allows companies to operate outside of the more densely populated and congested coastal cities.

What other forms of investment are becoming more attractive?

Goldsborough: There has been a shift in housing construction away from multifamily and toward single-family residential. Single family permits have steadily increased at 10 to 15 percent per year since 2011. Multifamily permits showed significant increase from 2010 to 2014, steady construction in 2015 and 2016 and a significant drop in 2017. The greatest demand continues to be for anything that is leased and the stronger the tenant, the better, but this is no different than any time.

In terms of market sector, apartments still are in the greatest demand and I expect that to be the case in the short term—a year or two—at least. That bubble will eventually burst, but three years ago I would have told you that by now the bubble would have burst. I was wrong about the strength of that segment, as it continues to be strong. 

How close are we to a new bubble? Is development poised to slow down in the next couple of years?

Goldsborough: Coastal markets tend to be leading indicators for the Midwest and the coastal Valbridge offices are not reporting dramatic changes in the commercial real estate sector at this time. I do not see an imminent downturn. We have enjoyed a robust cycle of recovery followed by expansion and new development and redevelopment continue to be in full swing. The slow interest rate increases that are occurring and expected may eventually cool things down, but I am bullish in the near term.

Image courtesy of Valbridge Property Advisors  

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CityPlace, Overland Park, Kan.

Mediware Information System, a portfolio company of TPG Capital, is planning a new headquarters in Overland Park, Kan. The office will be located within CityPlace Corporate Center and will encompass 66,000 square feet of space. The relocation is scheduled for mid-2019.   

Mediware will be the anchor tenant of CityPlace III, one of the four office buildings which Block Real Estate Services has in the works at its mixed-use development. Upon completion, the live-play-work community is expected to include approximately 600,000 square feet of office space, nearly 1,400 residential units, 140 senior living units, and almost 40,000 square feet of retail space, according to the developer’s property page.

CityPlace spans 90 acres and is bordered by Interstate 435, Route 69 and College Boulevard. It is also close to one of Block Real Estate Services’ Kansas City industrial facilities, which the company developed in a team effort with HFF.

Mediware will relocate from 11711 W. 79th St. in Lenexa, Kan., where it currently employs nearly 100 people. The company plans to increase its local workforce upon moving into its new headquarters.

Image courtesy of Mediware

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8101 College Boulevard, Overland Park, Kan.

Office Evolution has teamed up with Kansas City business executives Ryan and Erin Seager to open a co-working office space in the College Boulevard business district of Overland Park, Kan. The 11,000-square-foot center represents the first of the three co-working locations that the Colorado-based B2B franchise company is set to open in the Kansas City area.

Located at 8101 College Blvd., the business center will offer 40 private furnished offices, four conference rooms, a shared kitchen, a co-working lounge, and free parking. The building can be accessed via highways 69 and 435. Office tenants will also benefit from proximity to several hotels, restaurants, shopping and entertainment venues.

“Office Evolution members come from all different professions including lawyers, accountants, therapists—really anyone needing a place to hang their hat in a professional working environment—whether they need a place to pop in and check email, a conference room for meetings, or a dedicated office for a day, week, month, year or more,” said Ryan Seager in a prepared statement.

In June 2017, Office Evolution teamed up with financial services professional Andy Fry to open a similar co-working space in Charleston, S.C. The company has awarded more than 125 franchise locations across the country.

Image via Google Street View

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The Cordish Cos. is planning a two-level collaborative workspace in downtown Kansas City, Mo. Called Spark KC, the coworking space will encompass 15,000 square feet and is scheduled to open by late 2018. It will be part of the first live-work environment coming to the Power & Light District.

“With the rapid growth of the downtown population, the demand for downtown office space is higher than it has been in many years, and a large segment of that demand is looking for a co-working environment. Spark KC will be an ideal collaborative workspace for the Kansas City community, and we are very excited that it will be the pioneer for live-work opportunities in this market,” said Nick Benjamin, vice president of development for The Cordish Cos. & executive director of the Kansas City Power & Light District, in a prepared statement.

This is not the only project the company has in the works. In December, the firm also broke ground on the $260 million Phase II of Ballpark Village, a 700,000-square-foot mixed-use development in downtown St. Louis. 

First-class amenities

Spark KC will be located on the northeast corner of Truman Road and Walnut Street and will represent the office component within the Two Light Luxury Apartments, a 24-story residential tower scheduled for opening in May 2018. The high-rise is part of a four-building project which The Cordish Cos. is developing within the nine-block perimeter of the Power & Light District. The first tower, One Light—the second-tallest high-rise to be built in the downtown area in the last 50 years—was completed in 2015. 

Planned amenities at Spark KC include:

• fully-wired apartments
• AV-equipped conference and meeting rooms
• several large event spaces with catering services
• lounge spaces with media wall
• shared kitchen
• gourmet coffee and craft beer bar
• high-speed internet
• on-site parking
• dedicated community manager to facilitate events
• online reservation system
• concierge service
• indoor bike storage facility

In addition, the residents of Two Light will enjoy an outdoor and indoor pool and spa retreat with a bar and party room, a building sommelier and a 24-hour lobby attendant. Spark KC will join Power Life Yoga in the building, both of them filling up the 16,000 square feet of retail and office space available within the high-rise building.

Building live-play-work communities in downtown KC

The Power & Light District is a type of mixed-use development that has already become very popular in major cities across the country except for a few, including Kansas City. In fact, the city has been rather lagging in terms of new office developments, which has made several companies look for space in the suburbs. The city’s downtown features an aging stock office high-rises completed in the 1960s and 1970s. While some of these assets have been renovated, they still lack the type of amenities and perks that appeal to the Millennials. 

“The trend of how people work and live has vastly shifted in the past decade. There is now more fluidity between the personal and the professional, and having access to spaces that allow for collaboration outside of the traditional 9 to 5 workday is a must for today’s workforce. Kansas City is experiencing rapid growth to its downtown population, which is increasing the demand for downtown office space, specifically within a co-working environment,” said Shervonne Cherry, director of community and partnerships at Spark Baltimore. 

Questions have been raised regarding whether the city’s downtown might lose its business character and turn into yet another residential neighborhood if companies continue to avoid the area. Nevertheless, with projects such as Spark KC, developers are going against this trend, hoping to encourage start-ups and Millennials to return to the urban core. And the city officials are striving to revitalize the downtown area by attracting both residents and businesses through various urban services improvement projects such as the streetcar system, which opened for service in May 2016.   

“Having a hybrid of residential, workspaces, dining and entertainment in the same neighborhood attracts a diverse workforce of growing companies and entrepreneurs to the area from all over the country,” added Cherry. 

The new live-work community around One Light and Two Light targets professionals earning higher wages, since rents at One Light range between $1,000 and $3,000, according to Yardi Matrix data. Nevertheless, Spark representatives hope to replicate here the success they have achieved with a similar project in Baltimore, where they managed to attract more than 100 companies in 18 months. 

Images courtesy of The Cordish Cos.

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The Quintiles Building in Overland Park, Kan.

HFF has completed the sale of Quintiles Building, a 239,366-square-foot, Class A office property in Overland Park’s College Boulevard corridor. The HFF team worked on behalf of the seller, The Keith Corp.

Located at 6700 W. 115th St., southeast of the intersection between College Boulevard and Metcalf Avenue, the property provides easy access to interstates 35 and 435.

QuintilesIMS, a company activating in the health-care industry, occupies most of the four-story building. The property was constructed in 2006 as a build-to-suit for Quintiles and the firm recently extended its lease for 176,839 square feet through 2023. Honeywell took occupancy of the remaining 62,527 square feet in June 2017. According to Yardi Matrix data, the property includes 1,413 parking spaces and is LEED Silver-certified.  

“Quintiles’ recent long-term recommitment to the property combined with Honeywell’s lease resulted in this fully leased building being especially well received by the investment market,” said HFF Senior Director Peter Merrion, in prepared remarks. Merrion and HFF Senior Managing Director Mark Katz teamed up with Managing Director Sean Fogarty, a licensed Kansas real estate broker, to close the deal.

At the end of last year, HFF secured $20.7 million in financing for 301 Midtown, an 184,055-square-foot office property in Charlotte’s Second Ward.

Image courtesy of Yardi Matrix

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A rendering of Corrigan Station in Kansas City, Mo.

Copaken Brooks and 3D Development have scheduled to debut the second phase of Corrigan Station in February. The new 22,910-square-foot building will be an addition to the 10-story, 110,000-square-foot historic landmark whose revamp was recently completed. Academy Bank will anchor the property. Helix is the architect for Corrigan Station.

Located at the corner of 19th and Main streets in the Crossroads Art District, the project marks the first newly built office property in the district. Corrigan Station provides easy access to downtown, the Power and Light District and Crown Center via the new Kansas City streetcar line. 

The new three-story building will consist of a mixture of zinc, concrete and glass and will provide access to a four-story parking structure. Tenants will also have access to Corrigan Station’s rooftop clubhouse, patio and penthouse, which includes a conference room. A courtyard that will serve as a gathering place will link the historic and new Corrigan Station buildings.

“This new building will be a Class A, multi-tenant office building and bring more employees and innovative companies to the Crossroads area. This project is another step in continuing the rejuvenation of our downtown,” said Copaken Brooks Principal Jon Copaken, in a prepared statement.  

Corrigan Station—fully leased

Recently renovated, Corrigan Station is a historic property that now houses several local and national tenants. The building reached full occupancy at the end of last year, when Card Connect leased the last 11,150 square feet of space available and joined WeWork, Holmes Murphy, Hollis and Miller, The Roasterie Cafe and Corvino Supper Club.

Copaken Brooks Senior Vice Presidents John Coe and Ryan Biery are responsible for the leasing of Corrigan Station’s final phase.

Listed on the National Registry of Historic Places, Corrigan Station’s redevelopment began in 2015. “After successfully completing the renovation of Corrigan Station and bringing in a full list of tenants, we are very motivated to continue the momentum towards this second phase of the project,” said 3D Development Owner Vince Bryant.

The last phase of the project is slated for delivery this fall, with operations beginning around the holidays.

Image courtesy of Helix

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Piper Plaza

Baceline Investments has purchased Piper Plaza, a shopping center in Kansas City, Kan., for $6.3 million from McCownGordon Construction. The acquisition was partially funded by the sale of the firm’s Madison & Edgewood Shoppes in Indianapolis for $4.3 million.

Built in 2005 at 10940 Parallel Parkway, the property sits within one mile of Interstate 435. The building is situated in a busy retail district of the city and is less than a half mile from the Legends Outlets outdoor shopping center and a number of big-box retailers, including Sam’s Club, Target and Walmart. Two local bus routes operate a stop next to the property. Piper Plaza is 97 percent leased, with Quest Diagnostics, The UPS Store, Danny’s Bar & Grill North and a few smaller tenants occupying the building.

Funding the acquisition

The Madison & Edgewood Shoppes retail property, located at 5855 Madison Ave. in Indianapolis, was sold following just under three years of ownership by Baceline. The company had acquired the shopping center in January 2015 for $2.4 million, according to public records. Tenants in the building include a dental practice, a pet supply store and a few restaurants and salons. A Kroger grocery store under separate ownership sits next to the building.

“Piper Plaza is a notable addition to our portfolio and a quintessential fit for our niche investment approach,” said David Puchi, managing partner of Baceline, in a prepared statement. Regarding the sold property, he added, “Baceline was able to maximize the potential of Madison & Edgewood in a relatively short time by implementing institutional property management and leasing strategies, while replacing obsolete business concepts.”

Last month, Baceline acquired a community shopping center in Madison, Wis., for $3 million.

Image via Google Maps

The post Baceline Acquires KC Shopping Center, Sells Indy Asset appeared first on Commercial Property Executive.

2323 Grand Blvd., Kansas City, Mo.

Stanton Road Capital has acquired 2323 Grand, a 320,976-square-foot office building located within Kansas City’s Crown Center. Insurance company Assurant was represented by CBRE in the transaction, which also included a 2.3-acre surface parking lot located two blocks north, in the Crossroads Arts District.

“2323 Grand presented investors a stable, in-place cash flow and upside through the lease-up of existing vacancy and mark to market of in-place rents,” said Gina Anderson, first vice president at CBRE, in a prepared statement. “The development potential of the surface parking lot is very compelling, given its location within the dynamic Crossroads District, which is experiencing an unprecedented wave of new development and redevelopment that has attracted creative businesses and new residents alike.”  

In addition to Anderson, the CBRE team of brokers also included Vice Chairman Gary Carr and First Vice President Robert Hill.   

Recent improvements

The Class A office property is 83 percent leased to a number of prominent tenants including Sun Life Financial (U.S.) Services Cos. Inc., Seigfried Bingham and Thornton Tomasetti Inc. The previous owner has recently invested $6.5 million in upgrades to the building, which now offers amenities such as a cafeteria with a dining room and outdoor patio, a fully-equipped fitness center and several conference rooms.

Located at 2323 Grand Blvd., the 11-story building benefits from one of the most coveted Kansas City business addresses, overlooking Washington Square Park. The building is close to the Union Station Kansas City, several hotels and dining venues, Crown Center Square and the National World War I Museum and Memorial.

Image courtesy of CBRE

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Home2 Suites by Hilton Kansas City Downtown

Following the brand’s hotel opening in Oklahoma City a few days ago, Home2 Suites by Hilton unveiled its newest property, Home2 Suites by Hilton Kansas City Downtown, bringing the brand one step away from its 200th property milestone. The hotel features 114 suites. Owned by 2001 Main Lodging Partners and managed by True North Hotel Group, Home2 Suites by Hilton Kansas City Downtown includes tech-focused and eco-conscious amenities.

Located at 2001 Main St., off interstates 70 and 35, the hotel provides convenient access to major attractions, including the National World War I Museum and Memorial, the KC Streetcar light rail to Union Station and the River Market area. Guestrooms feature fully equipped kitchens, modular furniture and complimentary Wi-Fi. The hotel includes a combined laundry and fitness area and a heated indoor saline pool.

“Kansas City has never been a more popular destination and we are excited to offer cost-conscious travelers spacious suite accommodations in the heart of downtown,” said Dan Gudenkauf, general manager of the hotel, in prepared remarks.

According to recent research by visitkc.com, the Kansas City region welcomed 25.2 million visitors in 2016, a new record for the destination.

Image courtesy of Home2 Suites by Hilton

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The Corrigan Station in Kansas City, Mo.

Co-developers Copaken Brooks and 3D Development have reached full occupancy at Corrigan Station in Kansas City, Mo. CardConnect leased the last 11,150 square feet on the second floor. 

Located at 1828 Walnut St. in the heart of Crossroads, Corrigan Station provides easy access to downtown, the Power and Light District and Crown Center via the new Kansas City streetcar line. Occupancy for the CardConnect space is planned for the first quarter of 2018. CardConnect joins WeWork, Holmes Murphy, Hollis and Miller, The Roasterie Cafe and Corvino Supper Club, Chef Michael Corvino’s first restaurant.

”Each tenant brings a unique and innovative strength to Kansas City area. These additions continue to show the appeal of the downtown area and the potential for growth,” said Copaken Brooks Senior Vice President Ryan Biery, in a prepared statement. Biery and John Coe represented the landlord, while Scott Miller and Brian Bacon of CBRE represented the tenant in this leasing transaction.

A historic renovation

The Corrigan Station project includes the redevelopment of the historic 10-story, 110,000-square-foot Corrigan building and a new four-story, 277-space adjacent parking structure, which was completed in December 2016. Built in 1921, the property’s first floor is now used as retail space and the second through the 10th floor are for office use.  

Corrigan Station also includes a second development phase—the construction of a new three-story mixed-use building at the Northwest corner of 19th and Main. The 40,000-square-foot building will include retail and office space. When connected to the Corrigan building, the floor plates will combine to create 25,000-square-foot floor plates on superior floors, which is rare for the district.

The Corrigan Station development is the largest office project completed in downtown Kansas City in nearly a quarter century.

Image via Google Street View

The post Kansas City’s Corrigan Station Is Fully Occupied appeared first on Commercial Property Executive.

One of the 27 Store Here properties up for sale in the portfolio

A joint venture between funds managed by Westport Capital Partners and Store Here Management has disposed of a 27-property self-storage portfolio across Colorado, Georgia, Indiana, Kansas, Louisiana and Texas. The portfolio totals 1.7 million square feet across 12,171 units. 

Currently operating under the Store Here brand, the portfolio is 80.6 percent occupied and features amenities such as gate access, security cameras, climate-controlled or drive-up units, onsite management, as well as RV and surface parking. The properties are in eight MSA’s, including Colorado Springs, Colo.; Atlanta; Indianapolis; Kansas City, Kan.; Shreveport, La.; and Dallas, San Antonio and Austin, Texas. 

The HFF self-storage team of Senior Directors Barbara Guffey and Tom Doyle, Senior Managing Directors John Merrill and Jason Nettles and Managing Directors Sean Fogarty and Jules Sherwood marketed the property on behalf of the seller. 

“The quality of the assets, embedded upside, and most of all the economy of scale is what attracted numerous investors to the portfolio,” said Guffey, in prepared remarks. “The ability to acquire 1.7 million square feet in one transaction aligns with the buyer’s strategic growth plan, and provides an opportunity to implement and capitalize upon their operational platform.”

Image courtesy of HFF 

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Kubota Tractor Corp., marketer and distributor of Kubota-engineered and manufactured machinery and equipment, will build its North American distribution hub on 203 acres, which the company plans to purchase. The logistics center will be located near the manufacturer’s current facility in Edgerton, Kan.

The company intends to design and build two one million-square-foot facilities to expand its distribution capacity for the delivery of service parts and equipment to its increasing customer base in the U.S. In addition to the logistics facilities, Kubota will establish a fifth operational division and sales office in Edgerton, within the same complex.

“Kubota already employs 150 Kansans in Edgerton and the expansion could add another 150-200 on top of that,” said Governor Sam Brownback, in a prepared statement.

Kubota recently unveiled its new headquarters in Grapevine, Texas. The two-building campus includes 125,000 square feet of office space and a 68,000-square-foot R&D facility.

Video courtesy of Kubota Tractor Corp.

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Derby Marketplace, Derby, Kans.

Mid-America Real Estate Corp. together with RH Johnson closed on a retail center transaction on behalf of the seller, a private developer. The 100,000-square-foot property is part of Derby Marketplace, located in Derby, Kan.

Phoenix-based VEREIT represented the buyer, Cole Credit Property Trust V Inc., a REIT investing in single-tenant or multi-tenant retail properties subject to long-term leases. The seller’s brokers are Joe Girardi, Mid-America principal and Eric Gonsher, vice president with RH Johnson.

The parcel is located at the northeast corner of 71st Street and Rock Road and hosts retail stores Hobby Lobby, Ross Dress for Less and TJ Maxx. The shopping center, which has expanded significantly within the last years, is anchored by Target and Dillons Marketplace. It also includes several chain restaurants such as Olive Garden, Chipotle Mexican Grill and Panera Bread.

The property is approximately 12 miles from Wichita, Kans., and serves Derby’s population of more than 20,000.  

Image via Google Street View

The post Mid-America Real Estate Brokers KS Shopping Center Deal appeared first on Commercial Property Executive.

12 Corporate Woods, 10975 Benson St., Overland Park, Kan.

Group RMC Corp. tapped JLL’s Capital Markets team to secure financing for its acquisition of Corporate Woods, a 22-building office campus in Overland Park, Kan. Institutional lenders provided the 10-year, $221.3 million fixed-rate loan. 

Corporate Woods

The 294-acre, Class A office park features 2.2 million square feet of rentable space, making it the largest corporate campus between Chicago and Denver. Located between Interstate 435 and US-69, the campus is more than 90 percent occupied, with buildings ranging from one to 16 stories tall. 

Executive Vice President Adam Schwartz, Managing Director Jonathan Schwartz and Executive Vice President Mark Fisher led the JLL team. 

“This was an exceptional opportunity to acquire one of the nation’s premier suburban office campuses, and lenders competitively bid to be part of this deal,” Schwartz told Commercial Property Executive. “We are proud to have advised Group RMC on this transaction in an effort to bring their business plan to fruition.”

 In 2016 alone, JLL Capital Markets completed $145 billion in investment sale and debt and equity transactions globally. Recently, the team secured $78 million in bridge financing on behalf of Levcor Inc. for Pharr Town Center in Pharr, Texas. 

Image courtesy of Yardi Matrix

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The grand opening ceremony of ADS’ plant in Harrisonville, Mo.

Advanced Drainage Systems Inc., (ADS) a manufacturer of water management products and solutions for commercial, residential, infrastructure and agricultural applications, hosted a grand opening event for its new Harrisonville, Mo., manufacturing plant. The 72,650-square-foot facility hired 50 people. 

Located approximately 40 miles south of Kansas City, Mo., the 35-acre facility produces a wide range of ADS products, including ADS N-12 high-density polyethylene pipe and the company’s line of HP polypropylene pipe.

Enhanced efficiency

“This new plant allows us to meet the growing demand for all of our products in the region, while helping reduce the cost and time of delivery to our customers. Harrisonville provided an ideal site through land availability, close access to rail and interstate connections and a community with the right work force skills,” said ADS Chairman & CEO Joe Chlapaty, in a prepared statement.

Founded in 1966, ADS operates a global network of 3,700 employees, 63 manufacturing plants and 31 distribution centers.   

The Kansas City, Mo., area also appealed to UPS. The firm will add 200,000 square feet to its Lenexa, Kan., processing facility.

Image courtesy of ADS

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UC Funds and Gold Crown Properties Inc. opened East 9 at Pickwick Plaza, an apartment and retail community in Kansas City, Mo. East 9 at Pickwick Plaza features 260 units and 35,000 square feet of retail space on the first floor. The two companies worked together to structure and fund a $57 million capital solution for the project, which included a $30 million first mortgage loan, federal and state tax credits and equity. UC Funds also helped the borrower arrange federal tax credits for redevelopment through the National Park Service.

Situated at 933 McGee St., East 9 at Pickwick Plaza is located in close proximity to interstates 35, 70 and 670. Due to its location, the asset has attracted a diverse group of renters, many of whom are Millennials looking to move to downtown Kansas City.

Adaptive reuse

The redevelopment of the former four buildings on the site needed 22 months of construction works. The original property included an 11-story hotel, originally built in 1930 and known for its popularity among presidents who visited the city, a former bus terminal, an office building and a parking garage. According to Yardi Matrix data, the new luxury building now features two apartment towers with 49 studios, ranging from 353 square feet to 597 square feet, as well as 171 one- and 39 two-bedroom units.

Amenities include:

• a fitness center
• community rooms
• a swimming pool
• a business center
• wine lockers and a tasting room
• free Wi-Fi
• a spa
• 314 parking spaces

The lobby of East 9 at Pickwick Plaza is decorated with ornate chandeliers and sconces, designed and built by local artist Joe Munson, who also created the exterior blade sign and all commercial retail signage. More than 60 percent of the units are already leased. All apartments are expected to be fully leased by the end of 2017. According to the Kansas City Star, tenants of the commercial spaces include a UPS Store, City Gym and a restaurant and bar.

”UC Funds has been extremely active in Kansas City and many other urban downtowns throughout the country, bringing millennials together to ‘live, work, and play’. This asset is likely to spur increased development in its growing corner of the city,” said UC Funds Chief Credit Officer Jeremy Ross in a prepared statement.

Metropolitan Capital Advisors, MR Capital Advisors, Rosin Preservation, HarenLaughlin Construction, Helix Architecture + Design and Krudwig Structural Engineers were also involved in the project.

Image courtesy of East 9 at Pickwick Plaza website

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AJ Manufacturing’s new plant in Kansas City, Mo.

AJ Manufacturing, a company involved in stainless steel air distribution products for hospitals, laboratories, clean rooms, food processing facilities, water treatment plants and other businesses, moved into a new 70,000-square-foot facility in Kansas City, Mo. The company relocated to Three Trails Industrial Park from East 18th Street and increased its capacity by 50 percent.   

Plans for future growth

Located at 4593 E. 87th St. between interstates 49 and 435, the new facility in suburban Kansas City more than doubles the space of AJ’s previous manufacturing plant. Additionally, the company improved productivity through a new tower loader for its laser cutting machines. The facility also features a powder coating system.

“The increased space and new equipment will speed production, dramatically increase capacity and help reduce our already excellent lead times,” said AJ Manufacturing General Manager Tony Williams, in prepared remarks.  

AJ Manufacturing’s production line includes the popular “Criti-Clean” fan-powered laminar flow HEPA filter diffuser.

Image courtesy of AJ Manufacturing

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Summit Hotel Properties Inc. has closed the acquisition of a 812-key, five-hotel portfolio from Xenia Hotels & Resort Inc. for a total amount of $163 million, or approximately $201,000 per key. The properties are located in Fort Worth, Texas, Kansas City, Mo., Pittsburgh and Baltimore.

CBRE’s Hotels Vice President Arpit Shah, Executive Vice President Ron Danko and Managing Director Andy Wimsatt represented the seller. Summit intends to spend between $13 million and $16 million in capital improvements over the next two years.

Historic gems

The portfolio includes Courtyard Fort Worth Downtown/Blackstone, a 203-key hotel constructed in 1929 as the famed Blackstone Hotel, which affiliated with the Courtyard by Marriott brand in 1999. Located in Sundance Square in the heart of downtown Fort Worth, the asset features a fully equipped recreation center and an outdoor pool.

Courtyard Kansas City Country Club Plaza is a historic 123-key hotel located in Kansas City, Mo. The asset, developed in 1925 as the luxury Park Lane Apartments and converted to Courtyard by Marriott in 2006, features luxury bedding, state-of-the-art fitness center and an outdoor pool. Kansas City International Airport and Kauffman & Arrowhead Stadium are just minutes away from the property.

The 182-key Courtyard Pittsburgh Downtown was formerly four office buildings originally built in the early 1900s and converted to Courtyard by Marriott in 2004. The asset sits in the heart of the Cultural District and is conveniently located next to the David L. Lawrence Convention Center and many downtown attractions, including the Strip District, PNC Park and Heinz Field. Courtyard Pittsburgh Downtown features modern decor, luxury bedding, work areas with well-lit desks and free Wi-Fi, as well as three state-of-the-art meeting rooms.

Baltimore Inner Harbor Hotels

Hampton Inn & Suites Baltimore Inner Harbor is a 116-key hotel located just two blocks from the Inner Harbor and Baltimore Convention Center. The asset, housed in the former U.S. Fidelity and Guarantee Bank Building constructed in 1906 and converted to a lodging facility in 2004, features expansive windows, indoor heated pool and on-site fitness center.

The 188-key Residence Inn Baltimore Downtown/Inner Harbor is the only property in the portfolio that was purpose-built. Situated downtown, near the Inner Harbor, Baltimore Aquarium and Hippodrome Theatre, the hotel features a 24-hour fitness center, business center, as well as Wi-Fi and a pet-friendly policy.

 “Strong interest in the portfolio was driven by the ability to purchase institutional-quality, boutique-oriented assets affiliated with some of the industry’s most premium brands. In addition, the hotels offer distinctive historic architectural elements, dynamic locations within urban settings in geographically-diverse primary markets across the U.S. and meaningful revenue growth opportunity through capital investment,” said Shah in a prepared statement.

Summit Hotel Properties focuses on owning premium-branded assets with efficient operating models primarily in the upscale segment of the lodging industry. The company’s portfolio currently consists of 76 properties with a total of 10,705 guestrooms, located in 22 states.

Images Courtesy of Marriott and Hampton Inn

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10749 W. 84th Terrace, Lenexa, Kan.

Copaken Brooks facilitated the sale of a 37,585-square-foot flex building in Lenexa, Kan. John Coe, senior vice president with the company, represented the seller, Peavey Properties. The buyer was Easterly Government Properties Inc., a REIT focused on Class A commercial properties leased to U.S. government agencies. After a year and a half of marketing the property, Coe closed the deal at $4 million (or $105 per square foot), the complete asking price on the industrial building.

 A Well-Partitioned Flex Space

Located at 10749 W. 84th Terrace, the single-story, Class A facility offers a mix of office and warehouse space divided as follows: 19,242 square feet represent high-end office space; 18,116 square feet are designated for use as storage.

The property, situated on 4.2 acres, allows for more property expansion and was completely remodeled in 2005. It features 45 workstations, security access by biometric fingerprint, nine-feet ceiling heights in the office areas and 18-feet ceiling heights in the warehouse area, 119  parking spaces, three standard dock doors, one with a leveling system and a drive-in dock door, a large dock area and an additional large-vehicle parking.

Image courtesy of Peavey Properties

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Kansas City rent evolution, click to enlarge

Kansas City is in the midst of a transformation, growing as a financial and research center, with increased investment in infrastructure, all of which support multifamily fundamentals. Demand is healthy as young professionals move into the city, although a wave of new supply is expected to moderate rent growth.

The metro is consolidating its status as a financial services hub. The sector added 4,500 jobs over the past year, leading all employment segments. Kansas City is also seeing a growth in tech-oriented businesses, the most notable being Cerner’s Innovations Campus, which just completed the construction of its first two towers. The metro’s central location and its status as one of the biggest rail centers in the U.S. attracted large e-commerce and distribution companies. In the past year, Amazon and Spectrum Brands leased a total of roughly 1.8 million square feet in Logistics Park Kansas City.

The vibrant and diverse economy is drawing in investors, which pushed the total transaction volume for multifamily properties to more than $800 million in 2016. Rent growth will continue to be moderate. Demand should remain high—particularly in the urban core—but with 6,200 units under construction, new supply will dampen rent growth to 3.1 percent in 2017.

Read the full Yardi Matrix report

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The UPS facility in Lenexa, Kan.

UPS announced that construction is underway at its Lenexa, Kan., shipping hub. Nearly 200,000 square feet will be added, enhancing the processing capacity by 45 percent. When completed in 2020, the new facility will total about 430,000 square feet. The company’s second facility located 25 miles south in the Edgerton community will add another 197,000 square feet this fall in time for processing packages during the holiday season. The two projects represent a $220 million investment in the state and are expected to add 100 jobs over the next five years.

Located at 14650 Santa Fe Trail Drive in Lenexa, UPS’s facility is just a few minutes from the junction between Interstates 45 and 435, and approximately 20 miles from downtown Kansas City, Mo. The expanded facility footprint includes advanced package scanning and sorting equipment as well as more trailer staging and employee parking. Located at 19400 Essex St., the Edgerton development will include a UPS Customer Center and will dispatch trucks for routes in the area. The Promoting Employment Across Kansas economic development program supports UPS’ investment. Incentives include tax credits, workforce recruiting and training assistance.

“Kansas is at the center of the reliable UPS network to keep packages rapidly moving in all directions across the country. New technologies will give our people training and opportunity to make processing accuracy a hallmark and expand what we offer businesses and consumers who are benefiting from e-commerce growth,” said UPS’s Central Plains District President Fern Shaw, in prepared remarks.

Recruiting for part-time operations will begin in July, with training at the Lenexa facility planned before workers transition to the Edgerton location. Currently, approximately 5,000 UPS employees in Kansas provide package delivery, ground freight, air gateway operations, freight forwarding, contract logistics and support services.

Image via Google Street View

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Copaken Brooks recently announced Midwest Gateway, an industrial project totaling nearly half a million square feet. The development is currently underway at the doorstep of the BNSF intermodal facility in Edgerton, Kan. GMA Architects, ARCO National Construction, Shafer, Kline & Warren, Krudwig & Associates and Metro Air are among the project team members.

Aerial view of the Midwest Gateway in Edgerton, Kan.

Located at 32180 W 191st St., 25 miles southwest of downtown Kansas City, Mo., Midwest Gateway will be the nearest development-ready site at the entrance to the BNSF intermodal, a logistics, manufacturing and distribution hub in south Johnson County. This will allow tenants to reduce operating and drayage costs and maximize their supply chain. The speculative project is comprised of two buildings; one will be 301,603 square feet and the other 186,107 square feet. Both assets will allow flexibility for industrial users interested in a smaller-scale space.

“Midwest Gateway is an ideal project for us to extend our infill development expertise and deliver a state-of-the-art industrial project on a premiere site at the heart of the BNSF intermodal,” said Copaken Brooks Principal Bucky Brooks in a prepared statement.

The buildings will feature tilt-up concrete walls and architectural glass, at least 32-foot clear height, seven-inch floor slab and T-5 motion sensor lighting. The facilities will have ample docks with the ability to expand, plus truck parking and trailer storage, to accommodate warehouse, distribution and manufacturing users. Construction will be completed in February 2018 in time for tenant occupancy.

“For the last several years, we have not had product available for tenants interested in smaller-scale, flexible space. This unique project fills a gap in our portfolio that will allow us to service a greater number of tenants wanting to be in Edgerton, particularly those that may provide support to other intermodal-related businesses,” said Mayor of Edgerton Donald Roberts.

The property is co-listed by Bucky Brooks of Copaken Brooks and Nathan Anderson and Russell Pearson of NAI Heartland. Last year, Copaken Brooks contributed to developing the Corrigan Station, a mixed-use development in Kansas City, Mo.

Image courtesy of Copaken Brooks

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Terracon New Headquarters in Olathe, KS

While plans to build its new corporate office are in place, employee-owned engineering consulting firm Terracon has announced that it will continue to call Olathe, Kan. home. The company plans to build its new $21-million corporate headquarters just south of Corporate Ridge Office Park, its current location.

The developer is VanTrust Real Estate LLC, a regional real estate development company. Local authorities have worked to facilitate the development.

Terracon CAO, Gayle Packer, said that the decision to move into a new building is in tune with the company’s growth plans. “Terracon is focused on growth as evidenced by our internal expansion and acquisition activities. Our strategic plan guides us to continue growing at a rate of 10-15 percent each year, and we expect that the employment base at our corporate office will increase accordingly,” Packer said in prepared remarks.

The building is slated for completion in the first quarter of 2018, and development plans include collaborative spaces, a conference center and a great array of amenities. Until the new facility is in move-in condition, the company will continue to occupy the 2-story, 65,000- square-foot building near Kansas Highway 10 and Ridgeview Road.

Image courtesy of Terracon

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The footprint of Dollar Tree’s distribution center portfolio is about to increase by 1.2 million square feet, and the City of Warrensburg, Mo., has been selected to play host to the new facility, the Missouri Department of Economic Development just revealed. The project will cost $110 million to complete.

Dollar Tree is expanding in Missouri

“A strong and efficient distribution network is critical to our ability to grow and to maintain a low-cost operating structure,” Doubletree noted in its annual report, released March 28, 2017.

The Warrensburg center will take a spot along Highway 13 in the 600-acre Brady Commerce Park, roughly 50 miles east of Kansas City, leaving it well positioned to accommodate Dollar Tree’s network of retail stores in the Midwest region. “We have been very impressed with the business-friendly approach that the State of Missouri, Johnson County and the City of Warrensburg have provided,” Bob Sasser, CEO of Dollar Tree, said in a prepared statement. “This project demonstrates our commitment to western Missouri by creating hundreds of jobs in the region.” The Warrensburg location will yield 375 new positions within three years.

Presently, Dollar Tree has 11 distribution centers serving Dollar Tree stores in the U.S., and an additional 11 centers serving its Family Dollar locations. Last year, the company completed development of its largest distribution center, a 1.5 million-square-foot property in Cherokee County, S.C.  Dollar Tree’s current construction activity isn’t limited to industrial projects, however. The company is also planning to build a new $110 million corporate headquarters on a 70-acre site in its hometown of Chesapeake, Va.

Construction of the Warrensburg distribution center is scheduled to commence this month, with an eye toward completion in May 2018.  But plans for the project aren’t written in stone just yet, as the official green light is subject to approval of a local incentives package.

Image courtesy of Dollar Tree

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Kansas City, Mo.—The iconic Hotel Phillips Kansas City, now a part of the Curio Collection by Hilton owned by Arbor Lodging Partners and managed by NVN Hotels, officially reopened its doors to visitors and residents after undergoing a $20 million renovation. The 20-story hotel features 216 guest rooms and suites that combine modern-day comfort and amenities with 1930’s style. The hotel boasts food and beverage destinations, extensive meeting and event spaces and an arts and culture program.

Located at 106 W 12th St., Hotel Phillips is in the heart of downtown Kansas City. Listed on the National Registry of Historic Places, Hotel Phillips started a major renovation process in October 2016. The restoration team maintained the integrity of the hotel’s original art deco details, including the bronze and nickel metalwork, walnut paneling, stylized light fixtures and black glass ceilings. Design and tech renovations include flat-screen televisions, complimentary Wi-Fi, upgraded air and heating systems, noise-reducing windows, repairs of the building’s façade, a reconfigured hotel lobby that keeps the original 11-foot statue of the goddess Dawn, a game area where guests can enjoy shuffleboard and other classic games, entertainment and books from the 1920’s, 30’s and 40’s, as well as updates to the 1,020-square-foot Crystal Ballroom.

“When we purchased the hotel, we knew right away that it was something special and we didn’t want to disrupt its natural 1930’s elegance and charm. However, it needed to be updated with today’s modern amenities and travel standards,” said NVN Hotels CEO Sheenal Patel in a prepared statement.

Hotel Phillips, in partnership with Chicago-based DMK Restaurants, developed an Italian restaurant concept, Tavernonna Italian Kitchen. P.S. Speakeasy is an underground bar located in in the former mail sorting room of the hotel, committed to upholding its prohibition atmosphere by providing access only through a hidden door. The hotel also features a coffee bar.

Images courtesy of Hotel Phillips Kansas City

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Rivergate Center, Kansas City, Mo.

New York—Ready Capital Structured Finance has recently announced the closing of three non-recourse loans in the total combined amount of $35.9 million, for properties located in Kansas City, Mo., New York and Los Angeles.

The company secured a $13.3 million non-recourse fixed-rate loan that features a 60-month term with 48 months interest-only and is inclusive of a facility to provide future funding for capital expenditures and leasing costs for an industrial portfolio located in Kansas City. The portfolio encompasses two properties—Rivergate Center and Midtown Park. The first property is a five-building, 238,976-square-foot industrial asset situated at 1500-1634 N. Topping Road, which offers variable suite sizes, providing leasing flexibility and the ability to attract and maintain tenants with expansion capability. The second property is situated at 4900-5346 Winner Road and encompasses 320,400 square feet divided into two office/warehouse buildings and two warehouse/distribution buildings. Both properties offer immediate rail and highway access for distribution efficiency.

Ready Capital arranged a floating-rate $10.7 million non-recourse interest-only loan that features a 12-month term with two extension options and flexible prepayment for the recapitalization, renovation and stabilization of a 60-unit condominium property located in the Bay Ridge neighborhood of Brooklyn, New York. The property situated at 9511 Shore Road is part of a 104-unit seven-story condominium asset built in 1957, which offers unobstructed water views of the Narrows and Verrazano Bridge.

The third asset, benefiting from a floating-rate non-recourse interest-only loan in the amount of $11.85 million, is a 17,600-square-foot mixed-use asset located at 1485-1501 W. Sunset Blvd., in the Echo Park neighborhood of Los Angeles. The loan features a 36-month term with one extension option, flexible prepayment, and is for the acquisition, repositioning and stabilization of the asset. The property completed in 1928 is being fully renovated to provide 14,600 square feet of retail space and five residential units. The property will also include ample parking to accommodate the retail tenants.

Ready Capital Structured Finance is a nationwide commercial real estate bridge and mezzanine lender that provides non-recourse financings of up to $25 million for cash flowing and non-cash flowing properties, with flexible prepayment schedules and customized structuring.

Image via Google Street View

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Bob Marcusse, senior vice president of CBRE Kansas City, Mo.

Kansas City, Mo.—CBRE Group recently announced that industry veteran Bob Marcusse is joining the company as senior vice president of the Kansas City office. Marcusse spent 25 years leading the Kansas City Area Development Council and led the KCADC’s OneKC campaign.

“I’m delighted to have the opportunity to re-engage with the Kansas City regional business community in a meaningful way. The CBRE platform is very impressive and I look forward to using it to bring great value to our clients and the entire region,” said Marcusse in prepared remarks.

While with the KCADC, Marcusse and his team attracted companies that pledged more than 50,000 new jobs and roughly $5 billion of investments to the Kansas City area. The national business community and site selection consultants also chose KCADC as the number one regional economic development group in the country from 2014 through 2017.

“We could not be more excited about Bob bringing his ideas and connections to CBRE. Not many know the region’s business needs like him and we look forward to bringing that advantage to our clients,” said Mike Klamm, managing director of CBRE’s Kansas City office.

The new senior vice president will work with brokers to deepen their connections to the market and add his knowledge and expertise to CBRE’s offerings.

Image courtesy of CBRE

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Edgerton, Kan.—Spectrum Brands Hardware and Home Improvement division recently announced its intention to merge operations of two existing distribution centers in Charlotte, N.C., and Mira Loma, Calif., into a single 927,112 square-foot warehouse at Logistics Park Kansas City (LPKC) in Edgerton, Kan. The company will add approximately 315 jobs to the state of Kansas.

The Logistics Park Kansas City in Edgerton, Kan.

Construction of Spectrum’s new facility at LPKC began in March 2016 by NorthPoint Development. This is Kansas City’s largest facility ever to be constructed on a speculative basis. Spectrum’s new warehouse will be operational in March 2017 and will be known as Inland Port XXXIII. The company will start shipping from the new LPKC distribution center in April.

“Spectrum Brands HHI initiated a study of our existing distribution and fulfillment network in December with the intent of identifying the best option for the business to increase distribution capabilities and service levels, provide room for expansion, reduce overall inventory levels and improve cost management,” said Phil Szuba, senior vice president & general manager of Hardware and Home Improvement, in a prepared statement.

Located at 31100 W. 196th St., in Edgerton, a suburb southwest of downtown Kansas City, Inland Port XXXIII will be located near the entrance of the LPKC intermodal facility, which provides international and domestic container service, along with access to a heavy-haul corridor. LPKC is a 1,700-acre master-planned development anchored by BNSF Railway’s newest intermodal facility, which opened in 2013.

The project’s implementation is contingent upon formal approval of the workforce and equipment, as well as other incentives from state and local organizations. The Kansas Department of Commerce, the Kansas Department of Transportation, BNSF Railway, NorthPoint Development, KCP&L and the City of Edgerton contributed to Spectrum’s transition to Inland Port XXXIII.

Image courtesy of NorthPoint Development

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