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3rd Quarter 2020 Industrial Trends | Kansas City


Industrial Market Demand and Activity Remains Robust

Kansas City Industrial Overview

The industrial sector continues to recover and perform better than any other commercial real estate sectors throughout the Kansas City metro. Locally and nationally, industrial continued to post positive gains in Q3 2020, with the overall vacancy rate in Kansas City increasing slightly to 6.1% by the end of the quarter. The vacancy rate has declined by 10 basis points relative to this time one year ago. Net absorption totaled 1,751,177 SF for Q3 2020, slightly below the total quarterly delivery just over 2 million SF. Asking rents continue trending on a slight uptick, however, remaining relatively unchanged across the metro. Construction development, both speculative and build-to-suit, is approaching near all-time highs with several projects completed in Q3. Many additional projects are expected to be delivered by the end of the year, which will continue to drive elevated absorption totals throughout Q4 and into 2021. Currently, there is approximately 5.61 million SF within the development pipeline to be delivered in 2021. 

Growth Within the Industrial Market 

As a direct result of the COVID-19 pandemic, growth related to e-commerce sales has accelerated throughout the United States. Through the midway point this year, e-commerce activity accounted for a record of 11.8% of total retail sales, after steadily trending upward by about 1% annually for the past few years. By Q3, e-commerce sales accounted for 16.1% of all retail sales, a major increase in recent e-commerce related activity. Online grocery sales have contributed to this boom according to a recent study by grocery e-commerce specialist, Mercatus, projecting online grocery to expand to 21.5% of total U.S. grocery sales by 2025. 

Industrial real estate throughout the United States will continue to outpace other sectors, as demand will continue to be fueled by consumers spending more online, propelling the explosion of e-commerce retail. Big-box omnichannel retailers, third-party logistics providers, and food and beverage manufacturers supporting both e-commerce and fulfillment will continue their expansion efforts across North America. Amazon continues to seek space in nearly every major market to fulfill their current demand levels. The increasing reliance on e-commerce for basic goods fueled demand for industrial bulk space as supply chains continue to be right-sized, shifting away from the former “lean” inventory strategies. Looking forward, we expect holiday sales to provide an additional boost to the industrial market in the fourth quarter.

From a manufacturing standpoint, the Institute for Supply Chain Management’s PMI index registered 55.4% in September. This figure indicates expansion in the overall economy for the fifth straight month after April’s initial contraction, with higher projections for the index in the future.

Recent Activity Around the Metro

The Kansas City industrial market continues to remain very active, spurred by the demand for distribution and warehouse space to keep pace with the growing e-commerce segment. Two large industrial users announced plans for Wyandotte County during Q3. Urban Outfitters will build a new 880,000 SF distribution facility near the Kansas Speedway. The planned $350 million development will support nearly 2,000 jobs upon completion in early 2022. Amazon announced they will occupy a new fulfillment center at the former site of The Woodlands racetrack, which is expected to create 500 new jobs. Scannell Properties will develop the logistics building with a footprint of just over 1 million SF with plans to develop additional buildings at the site in the future. KCI Logistics Centre announced two new tenants; Pure Fishing will occupy 542,000 SF, while Mechanix Wear will occupy 160,000 SF. In Liberty, Kenco Logistics, a leading 3PL, will occupy 295,000 SF in the first building of Liberty Logistics Park. Johnson County added two large tenants; American News Group leased 455,000 SF within Lone Elm 716, while Bayer/DHL leased 300,000 SF at Midwest Gateway Building 1. In Raymore, BoxyCharm leased 575,000 SF at Southview Commerce Building II.

Northland Park Buildings 5 and 6, totaling 900,000 SF, were delivered in Q3. Inland Port VII, a 953,000 SF spec building located at LPKC, also delivered in the third quarter. More than 5.69 million SF is under construction in the submarkets we are currently tracking, with an additional 2.05 million SF under construction in Cass County between Southview Commerce Center and Raymore Commerce Center. Additional deliveries expected to be complete by the end of 2020 include Liberty Logistics, Southview Commerce Building II, KCI Logistics VI, Northland Park Building 8, and the first Meritex surface building.

Related Experts

Martin Maguire

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Martin Maguire is the Senior Research Director for Colliers International | Kansas City. As part of this role, he coordinates and supervises the various resources and personnel in the research department. Martin is responsible for the aggregation, analysis, interpretation, and reporting of market research, including all quarterly and annual market reports for the Kansas City and Lawrence markets. He establishes procedures for acquiring, entering and verifying real estate marketing data related to properties, listings, tenants and comparable transactions for all local divisions tracked within the database, while maintaining data integrity. He works with all transaction service professionals in serving clients by providing an elevated set of skills, analysis and project management. He is in charge of producing all reports and gathering data for use in analysis, marketing and presentations to corporate clients. He develops client-oriented interpretations and market trend graphics for client understanding. 


Martin has been with the firm since July 2012.  Prior to his association with the firm, Martin was employed by Cohen Financial, a commercial real estate investment banking company specializing in loan servicing with the asset management team.  Prior to his move to Kansas City, Martin previously worked with Capital One N.A. as a disposition analyst within the REO Division, as well as with CoStar Group Inc. as a research associate.


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Ben Boyd

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Ed has significant experience in representing many local and national clients in their real estate assignments.


Ed is an active member of the Kansas City community and supports several organizations. Some of these include Cristo Rey Corporate Work Study Program, Morning Glory Ministries and United Way Tocqueville Society.  He is a former board member of Coaches vs. Cancer with the American Cancer Society, Notre Dame de Sion High School and former Board President of Genesis Charter School.

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Since 2001, Tom has represented numerous local and national clients with their real estate requirements.  He has extensive experience in the sale and leasing of office and industrial properties having been involved in the negotiation of over 500 sale / lease transactions totaling over 10  million square feet with  a total transaction volume of over $300 million dollars.

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Altec Industries

Murphy Logistics, Inc.

Plastic Packaging Technologies

Carter Waters

American Property LLC

AG Solutions



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Jack Higgins

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