AREA BlogKeeping you up-to-date on Kansas City commercial real estate trends.

KC Office Market Outlook

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It is no question that the pandemic has changed the way we’ve gone about working.  While the work does not go away, the way in which we operate is evolving. In today’s world, we are seeing the trend to focus in on the quality of space, rather than the quantity of space for employees. Our spaces are used to bring teams together to collaborate, as opposed to being a place to go to be heads down focused.

The Kansas City Business Journal interviewed AREA’s Tim Schaffer on what he forecasts for the office market to see in the coming years. Here is his take:

•  We are seeing many companies going with a “remote first” strategy- where working remotely is the primary option for most or all employees. This strategy isn’t new, it’s been exercised by sales force organizations for years, but is now bleeding out into other industries. Those that are employing a remote first workplace envision their space more as a club house. While heads down work is done out of the office, companies still need an office to meet clients, recruit, train, collaborate and celebrate success to support and enhance their existing culture.

•  In the past we were always looking for companies adding employees and expanding; but today, just because you are adding employees doesn’t mean you need more space. Although we are still looking for expanding companies, we are also catering to those companies that are getting smaller. A 50,000 square foot company may only need 10,000 square feet today and as a result they can’t put the same meaningfully scaled amenities within their space that they once had. Thus, they are looking for the building to do more for them than just provide space for desks. An example of this is at Lightwell, where we designed an ecosystem that provides all of those environments that use to be within a tenant space, outside their space within the building. This includes large training rooms, and breakout private conference rooms, all equipped with video conferencing technology for small groups up to the entire company that may want to have a sales meeting with their office in another city; a tenant lounge with a pool table and stereo system for after work team building; and full building Wi-Fi so that employees can work anywhere in the complex. Food and beverage options within the building is our last piece, which will be in place this summer. Made in KC will be opening their coffee shop on the first floor and Strang Hall will have three chefs serving every day with a full bar for after work meet ups. Our strategy was in place pre-pandemic, so we didn’t pivot to meet this change. The world pivoted, and we happened to be in the right place to help companies deliver a one-of-a-kind environment for their employees, one that increases value to each employee even as their footprint grows smaller.

•  As we make our way through this year into mid-2023, we are going to see a clear path of everyone’s plans moving forward. There will be a lot more moving around of tenants and finding quality buildings to reduce footprint but still have that great environment for their employees.

To read the full article in the Business Journal, click here.

The Redevelopment of Kansas City’s Historic West Bottoms

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The Historic West Bottoms lies where the Missouri River and the Kansas River meet. It is one of Kansas City’s oldest and most recognized neighborhoods, filled with a rich history. The West Bottoms were first and foremost a place for trade for the Indians and French Trappers.  The railroads then soon swooped in, making the city flourish with the establishment of the stockyards in 1871. Then in 1903, the West Bottoms were hit by the Great Flood, wiping out the investments into schools, churches, and homes. Industrial investments remained strong until after WWII, when the West Bottoms took an economic hit and thousands of jobs were lost. The area took another hit in 1951 with a huge flood, forcing companies to move out and never to return. Over the years, the area had not been revitalized.

Flash forward to 2022, and SomeraRoad has assembled 26 acres of land in the West Bottoms with generational mast plans to revitalize the historic area. While planning is still in the early phases, they are currently calling for 1,238 apartments, hospitality, mixed-uses, a pocket park, courtyard, and open-space amenities through the end of 2035. Preliminary plans include:

  1. Phase One: Demolition of the Weld Wheel building, making space for roughly 266 apartments, conversion of the Moline Plow Building to 127 apartments, adaptive mixed-use reuse of several buildings on Union Ave, a 50-room hotel conversion of the Avery building, an open park in place of an empty parking lot and implementation of 520 parking spaces.
  2. Phase Two: Building demolition for structures NW of 11th St & Mulberry making room for a 308-apartment development and mixed-uses.
  3. Phase Three: The Crane Co. building will be converted to 31-apartments and 236 multifamily units will be developed to the east of 1105 Hickory St.
  4. Phase Four: Remaining apartments will be completed at former Weld Wheel site, adaptive mixed-use reuse for 45-apartments at 1320 W 12th, mixed-use revamp of 1222 W 12th & 1000 W 12th, construction begins for 72-apartment project at surface lots NW of Mulberry & Union, NW St. Louis Ave & Santa Fe St, and demolition of a building northwest of 11th & Hickory for 27 new apartments.
  5. Phase Five: Buildings 1323 & 1331 Union will become 54-apartments

We look with much anticipation to what the next chapter of the West Bottoms will be. AREA will serve as consultants to SomeraRoad on the redevelopment.

To read the full article in the Kansas City Business Journal, click here.

Grand Place Lands BOK Financial

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Grand Place, the $98 million redevelopment of the Kansas City Star building, has signed its first pad site occupant.  BOK Financial plans a two-story, full-service banking center at the southeast corner of 17th Street & Grand Blvd.  The new location will best allow the bank to reach more customers, while bringing the life back to the once undeveloped corner and investing into the city with their long-term commitment.

The first floor of BOK’s new space will include a full-service branch with a drive-thru off 17th street, as well as office space for BOK’s Corporate Trust division. The second floor will include a 75-person presentation room; a pre-function space; and a patio with skyline views. Construction is slated to break ground in summer, with an opening date around second quarter 2023.

The overall plans for the Grand Place development include: a rooftop patio with bar and skyline views; a clubroom with breakfast and lunch service for tenants, guests, and private events; a boiler room converted to an upscale barbershop, spa, and locker rooms; a European style market and food hall with 15 kiosk kitchens, a bar, lounge and cafe; and finally, a private plaza drive for guest arrival and pick-up items from the the future market. Along with the main building amenities, the redevelopment will also include a future restaurant, office building and BOK Financial.

AREA’s Tim Schaffer and Sean Craven represented Grand Place in this transaction.

To read the full article in the Kansas City Business Journal, click here.

KCBJ Future of Kansas City- America’s New Main Streets

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AREA’s Sean Craven recently had the opportunity to sit on the Table of Experts panel for The Kansas City Business Journal’s Future of Kansas City: America’s New Main Streets. President and CEO of The Downtown Council of Kansas City, Bill Dietrich, moderated the panel, who’s focus was on economic development and positioning the KC metro for continued growth. The discussion followed a national virtual event led by best-selling author, economist and urban studies theorist, Richard Florida.

Some of the topics discussed included getting people back in the office; enhancing collaboration with hybrid work model; attracting new talent for the future; how small & mid-size companies are navigating the changing business climate; downtown development catalysts; neighborhood connectivity and the Kansas City Streetcar.

A few key takeaways from this discussion:

  • Employers are now competing for talent with the home office. Is a company willing to offer that work-life balance and what does their employees’ time spent in the office look like? Employers are focusing on flexible floor plans, quality amenities and break areas to promote collaboration and mimic home offices.
  • The remote or hybrid work model works for many, but not all. The mentor-mentee and training relationships suffer from this business model, especially for the younger employees who are not trained or proficient and don’t yet know their goals. They need an environment where they are making business contacts with people that can help them with their careers.
  • Many companies are also planning and thinking about what the next generation of talent will want when they enter the workforce. They are making decisions based on both the environment within their office as well as outside of it. Are there entertainment and restaurant options outside their front door? Are they downtown or in a walkable neighborhood?
  • There are development challenges with construction costs and mixed incentive perceptions that may hinder the development progress that our city is making. Without development incentives, the types of projects being built in our city may not be the cutting-edge and forward-thinking projects that our city wants and needs.
  • Over the last 15 years Kansas City has made its urban core more attractive to employees and residents with projects like The Kauffman Center for the Performing Arts, T-Mobile Center, the future waterfront stadium for the KC Current Women’s professional soccer club and the Kansas City Streetcar. The Streetcar line is creating real estate development opportunities, but is also an investment in public transit, with a predisposition that is changing. This change and acceptance of public transportation may change the elements of future development projects in the sense of parking needs now versus five years from now.
  • In the next five years Kansas City needs to focus on connecting neighborhoods. The streetcar addition will further advance this. We also need to focus on creating more public spaces downtown. Urban area investments create a synergy that sparks development, more investments, additional amenities and a sense of community. An important urban catalyst could be the investment in a downtown ballpark for the Kansas City Royals.

America’s New Main Streets discussion also featured co-panelists Brian Hoban, chief commercial banking officer for Country Club Bank’s and Doug Stone, attorney for Lewis Rice LLC’s .

Click here to read the full discussion. Click here for the PDF version of the article.

Cycle City Now Open in The River Market

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Cycle City’s second location is now open in the River Market’s historic Water Building at 201 Main Street. The full-service bike shop’s nearly 5,000 SF space on the main floor of the building includes both a retail shop and servicing space. The retail shop offers bikes for all levels including road, mountain and gravel bikes along with clothing, accessories and snacks.

Cycle City’s popular bike shop has been open in Parkville, MO for 18 years. This second location will fill a void in the booming downtown/River Market area. Owner Joe Fox chose the location for this reason as well as the traffic from adjacent trails and the neighborhood spirit. “I like the River Market because of our possibility of having a very successful shop in downtown Kansas City,” he said. “I love the neighborhood feel, particularly on Second Street, with the apartments and condos.”

They plan to capitalize on this neighborhood feel with River Bluff Brewing, who is also located in the Water Building. Group rides as well as free drink tokens while you wait for your bike to be serviced are a few of the ideas they have for partnering with the microbrewery.

The Kansas City Water Works building was constructed in 1905. The main floor was designed to house the following: a stable with stalls for forty horses, space for thirty-five buggies and wagons, a harness room, wash rooms and a furnace room which supplies steam heat for the building. The second floor was designed for offices of the Superintendents of Pipe Lines and the Meter Department. Also located on this floor were the blacksmith shop, wagon repair shop and a large storage room for hay. The building was renovated in 2003 and purchased in 2020 for new retail and office.

AREA’s Tommy McNeese and Tim Schaffer fully leased the Water Building last year.

For CityScene’s articles on Cycle City and The Water Building, click here and here.

Follow Cycle City on Facebook & Instagram for future events and shop info!