By Susan Smith, Vice President Sales & Leasing
The Kansas City Office market displayed lower rental rates in the third quarter as landlords balanced lease term profitability with space inactivity.
Rental rates, based on a quoted full-service basis, dropped an average of 4.25 percent in all seven submarkets from Q3 2010 to Q3 2011. As landlords continued to prioritize filling vacant spaces at the expense of short-term profitability, the third quarter realized several sizeable transactions and announcements.
Continuing its significant commitment to the Kansas City metro, Burns & McDonnell announced an eight-year renewal for 156,000 square feet at 9201 State Line in Kansas City, MO. In addition, Burns & McDonnell will add an estimated 500 jobs to the metro by 2013 and invest $25 million in renovations to its headquarters campus located at 9300-9400 Ward Parkway, Kansas City, MO. AMC Entertainment, Inc. announced in mid-September its intent to relocate its headquarters and 400 employees from 10 Main Center located in the CBD to Park Place in Leawood, KS. The State of Kansas offered an incentive package reportedly worth more than $47 million to AMC, which has been located in downtown Kansas City, MO since 1920.
Other tenants benefitting from the current incentives environment in the third quarter include North American Savings Bank, Marks Nelson Vohland Campbell Radetic, LLC, and Star Financial.
As the local environment continues to be a tenant’s market, those companies who can demonstrate current fiscal impact and future job growth, whether in Missouri or Kansas, will be able to take advantage of today’s weak market conditions and leverage maximum financial incentives at both the state and municipality levels.
Susan Smith is Vice President of Sales & Leasing at Zimmer. Contact Debora at 816.512.1030 or dfield@zimmercos.com. Click here to download Zimmer’s complete Kansas City Office Market Report.
