Kansas City’s industrial sector is on the rise with new construction projects.
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Sponsor Our ArticlesKansas City is witnessing a significant industrial boom, achieving a rare fourth place in the national market rankings. With a vacancy rate of just 4.9% and an increase in construction projects, the city is becoming an attractive space for businesses and investors. Year-over-year rent growth of 5% further underlines this trend, demonstrating the high demand in the industrial sector. As the city expands its construction pipeline, positive engagement and community spirit at events like the Kansas City Industrial Summit reveal optimism about the future.
Kansas City is experiencing an exciting industrial boom, and it seems like it’s just getting started! According to recent findings, the industrial market in this vibrant city has been gaining serious traction, demonstrating strong growth with decreased vacancy rates and bustling construction activity. This is great news for businesses and investors alike!
In a report released on February 18, 2025, Kansas City found itself in an impressive fourth place in the industrial market rankings for Q4. When stacked against 30 major markets, Kansas City was a standout star, especially with a vacancy rate in the industrial sector of just 4.9%. This accomplishment positions it among only five of those markets that are seeing such a promising trend of declining vacancy rates!
For those keeping an eye on the construction scene, you’ll be glad to hear that the industrial space pipeline in Kansas City has enjoyed a leap! New construction projects have surged, pushing the pipeline from 10.7 million square feet in Q3 2024 to an impressive 11.5 million square feet by Q4 2024. This marks a significant milestone in our city’s journey toward increased industrial capacity.
In the world of real estate, a rise in rents can often be viewed as a double-edged sword. However, in this case, it shows how much demand there is in Kansas City! Year-over-year, rents have also increased by 5%, jumping from $4.8 per square foot in December 2023 to $5.1 per square foot by the end of 2024. This upward trend demonstrates the strength of the city’s industrial sector and its growing appeal.
As Kansas City basks in its fourth-place glory, let’s not forget the contenders. Phoenix, Arizona leads the charge as the best industrial market in the nation, followed by Orange County and Inland Empire in California. Not far behind, Atlanta, Georgia, is holding steady in the fifth position, keeping the competition fierce!
Interestingly, the national picture for industrial vacancy rates stood at 8% in December 2024. This marks a notable increase from under 4% just two years ago. Industrial spaces in port markets have seen an even more drastic shift, climbing from below 2% to a significant 7.8% in the same timeframe. Fortunately, industry experts believe that vacancy rates will level off in early 2025, paving the way for a gradual decline later in the year as supply is absorbed.
Across 30 major markets in Q4 2024, a whopping 34.5 million square feet of industrial space became available, with an additional 188.2 million square feet still under construction. Kansas City is stepping up its game, emerging as a leading industrial development market in the Midwest, with nearly double the construction pipeline compared to last year. With new projects like Heartland Coca-Cola’s development in Olathe and a cold storage facility in New Century set to create buzz, it’s clear that there’s a plan in motion.
In perhaps one of the most validating moves, the Kansas City Industrial Summit, held in August 2024, ended on a high note, with attendees embracing a positive outlook despite facing economic challenges. This speaks volumes about the resilience and determination within the community.
So, in conclusion, Kansas City’s industrial market is showing no signs of slowing down. With falling vacancy rates, new construction, and rising rents, the future is looking exceptionally bright. If you’re looking to invest or simply curious about the bustling world of Kansas City’s industrial scene, now is the time to pay attention. The city is thriving, and opportunity is knocking!
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