This is a trend that we’ve been seeing for a few years, but it continued to accelerate in 2019 and I believe everything is in place for us to see increased investment and growth over the coming years. A big part of what I find exciting about this trend is how widespread it really is. Companies are placing jobs in Kansas City, as the local economy created 21,000 new jobs in 2019.
Investors are showing a greater and greater interest in all categories of commercial real estate in Kansas City and when they make a purchase, they are prepared to further their original investment. Finally, the ongoing development in office, industrial, and multi-family demonstrates that people are optimistic about Kansas City’s growth. Even the much-maligned retail category has bright spots, with the Nordstrom project on the Country Club Plaza one of the retailer’s more aggressive developments anywhere in the country.
That growth is vital. As someone who works in the commercial real estate field, obviously I view it as a good thing when I see new buildings going up. But as someone who was born and raised in Kansas City it means more to me than just professional opportunity. When I see institutional money coming from Boston and New York to purchase buildings like 2345 Grand and 1100 Main, that’s encouraging. When I see those same companies arrive and immediately inject more capital into the projects to upgrade them, that is when I get excited about Kansas City’s momentum.
The largest investment deal of the year was the purchase of the Sprint Campus in Overland Park, and the out-of-town ownership immediately set about making additional capital improvements and looking for ways to build a better asset for the current tenants and new tenants they hope to attract to the property.
Almost every metric I have seen from 2019 shows local and national groups demonstrating confidence in Kansas City’s future. Our overall transaction volume for office, industrial and retail increased over 35% compared to 2018. Multifamily investors are increasingly attracted to higher-priced properties in the local market. Our industrial market is one of the strongest and fastest growing anywhere in the US.
I believe great things are on the horizon for Kansas City, and not just because Patrick Mahomes is only 24 and already has an MVP, a Super Bowl MVP, and a championship ring. I think in a few years we will look back on 2019 as the year where the secret about Kansas City really got out in a big way. A lot of things are happening across our market, but the 2019 data indicate that a wide variety of groups with a broad scope of interests all view Kansas City as a market positioned for growth and opportunity. Kansas City has always been a special place, and we are moving into a great period to be a part of this vibrant city.