Downtown office vacancy

Issues concerning Downtown as described by the Downtown Council. River to 31st Street, I-35 to Bruce R. Watkins.
earthling
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Downtown office vacancy

Postby earthling » Wed Aug 10, 2016 2:21 pm

Colliers claims overall downtown Q1/2016 office vacancy down to 12.3%, however Class A at 18%. Q2 report not out yet...
http://www.colliers.com/~/media/files/M ... ffice.ashx


CBRE says overall downtown vacancy Q2 is 16.5% with Class A at 14.8%.
http://www.cbre.us/o/kansascity/Pages/m ... ports.aspx

Colliers tracks a lot more buildings than CBRE.

Typically developers take interest with speculative building when vacancy is below 12%, but Class A is maybe still too high.
Last edited by earthling on Mon Apr 10, 2017 12:30 pm, edited 1 time in total.

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Re: Downtown office vacancy 2016

Postby UrbanKC » Fri Aug 12, 2016 8:17 am

It's good to hear this news, I have been wondering about the vacancies for a while.

How "efficient" or attractive is some of the office space in City Center Square, Town Pavilion and One Kansas City Place?

One Kansas City looks like the floor plates might be too small for modern companies. City Center is oddly shaped. Town Pavilion looks the closest to what modern companies would prefer.

I have always thought that Town Pavilion could be a nice building to serve as a hotel, or condos. I've also had thoughts that City Center Square could easily accommodate condos, and the lower roof retrofitted to feature a rooftop terrace and bar.

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Re: Downtown office vacancy 2016

Postby earthling » Fri Aug 12, 2016 11:55 am

It's a small improvement I suppose but pretty sad downtown Class A vacancy still that high. And downtown Class A avg rent $ is lower than WyCo and E JaxCo, ouch.

Here is KC compared to other markets (Q1/2016). They bundle Plaza/Midtown with Downtown for some reason...
http://www.colliers.com/-/media/files/m ... 7af707defb

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Re: Downtown office vacancy 2016

Postby earthling » Fri Sep 16, 2016 10:34 am

Colliers report for Q2/2016 is out for US overall but not KC market report yet. Claims 'downtown' KC vacancy (they include Midtown/Plaza for some reason) improves from 11% to 10.4% compared to last quarter...

See page 8 for downtown, metro on page 12...
http://www.colliers.com/-/media/files/m ... f?la=en-us

Here is CBRE Q2 KC report...

Image

Image
Last edited by earthling on Fri Sep 16, 2016 12:09 pm, edited 2 times in total.

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Re: Downtown office vacancy 2016

Postby kboish » Fri Sep 16, 2016 12:03 pm

Pictures didn't post for me...

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Re: Downtown office vacancy 2016

Postby kboish » Fri Sep 16, 2016 12:09 pm

earthling wrote:Colliers report for Q2/2016 is out for US overall but not KC market report yet. Claims 'downtown' KC vacancy (they include Midtown/Plaza for some reason) improves from 11% to 10.4% compared to last quarter...

See page 8 for downtown, metro on page 12...
http://www.colliers.com/-/media/files/m ... f?la=en-us




p6 charts seems to indicate it is time to build in KC. KC falls in the low rent, low vacancy quadrant of the first table and falls in the decreasing vacancy and increasing absorption quadrant for the second table. That is a positive sign for a potential office project in the pipeline soon.

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Re: Downtown office vacancy 2016

Postby earthling » Fri Sep 16, 2016 12:10 pm

kboish wrote:Pictures didn't post for me...

How about now?

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Re: Downtown office vacancy 2016

Postby kboish » Fri Sep 16, 2016 12:10 pm

earthling wrote:
kboish wrote:Pictures didn't post for me...

How about now?


showing now.

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Re: Downtown office vacancy 2016

Postby earthling » Fri Sep 16, 2016 12:13 pm

kboish wrote:
earthling wrote:Colliers report for Q2/2016 is out for US overall but not KC market report yet. Claims 'downtown' KC vacancy (they include Midtown/Plaza for some reason) improves from 11% to 10.4% compared to last quarter...

See page 8 for downtown, metro on page 12...
http://www.colliers.com/-/media/files/m ... f?la=en-us




p6 charts seems to indicate it is time to build in KC. KC falls in the low rent, low vacancy quadrant of the first table and falls in the decreasing vacancy and increasing absorption quadrant for the second table. That is a positive sign for a potential office project in the pipeline soon.


Downtown's vacancy is still above 12% and developers typically don't build speculative (meaning w/out a tenant signed) unless below 12% with a pattern of demand, which downtown doesn't have yet. The Plaza does though, which is why Highwoods wanted to turn Plaza into an office district.

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Re: Downtown office vacancy 2016

Postby FangKC » Fri Sep 16, 2016 4:49 pm

With constant neighborhood objections to new development around the Plaza, it would seem to me that City policy should be modified to encourage office development mostly downtown with the granting of targeted subsidies there. Exceptions could be made for distressed neighborhoods like along Troost, or the Paseo Gateway. Essentially the City would say that if you want incentives for new office space, you have to build in Greater Downtown. If you want to build an office building on the Plaza, good luck with that, but use your own money.

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Re: Downtown office vacancy 2016

Postby earthling » Thu Sep 22, 2016 9:47 pm

Colliers Q2/2016 Office report out...

Downtown overall improves from 12.3% Q1 to 11.7% Q2 vacancy. Class A improves from 18% to 15.5%. Colliers numbers are different than CBRE because Colliers tracks many more buildings.

South KC shows 800K sqft under construction, likely all Cerner - close to half the near 1.8M office active construction metro wide.

http://www.colliers.com/~/media/files/M ... ffice.ashx

Image

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Re: Downtown office vacancy 2016

Postby earthling » Thu Dec 01, 2016 1:36 pm

Colliers Q3/2016 report has come out...
http://www.colliers.com/-/media/files/m ... office.pdf

Downtown vacancy slightly improves from 11.7 to 11.3%. But Class A is slightly worse from 15.5% to 15.9%, not terrible but not good enough to entice spec development. KC metro overall improves slightly from 10% to 9.6%.

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Re: Downtown office vacancy 2016

Postby ldai_phs » Thu Dec 01, 2016 2:36 pm

what vacancy is needed for spec devlopment downtown?

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Re: Downtown office vacancy 2016

Postby earthling » Thu Dec 01, 2016 2:37 pm

Not sure about these days but last decade 11-12% Class A or lower was typical to trigger spec development. And there would need to be a momentum that is lowering vacancy, which downtown Class A hardly has.

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Re: Downtown office vacancy 2016

Postby earthling » Thu Dec 01, 2016 2:42 pm

CBRE Q3/2016 report also out.

The don't track as many buildings as Colliers but show downtown overall vacancy at 16.4% and Class A at 15%. Colliers likely more accurate given they track more buildings. Depends on how you measure and define a leasable building.

http://www.cbre.us/o/kansascity/Pages/m ... ports.aspx

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Re: Downtown office vacancy 2016

Postby aknowledgeableperson » Fri Dec 02, 2016 3:17 am

earthling wrote:Not sure about these days but last decade 11-12% Class A or lower was typical to trigger spec development. And there would need to be a momentum that is lowering vacancy, which downtown Class A hardly has.


If you take out the GSA movement to downtown a few years back I would think spec developers would want to see a lower % and held for a period of time. My guess is probably at least 5 years from now but probably longer.

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Re: Downtown office vacancy 2016

Postby earthling » Mon Dec 05, 2016 10:38 am

Here is Colliers' Q3 national report if you want to see how KC compares. For some reason they include Plaza/Midtown as part of Downtown...
http://www.colliers.com/-/media/files/m ... report.pdf

Says Downtown to Plaza overall vacancy is now under 10%, which is very good. Class A vacancy for that stretch is about 13% but that's because Plaza is below 5%, downtown Loop is over 15% and with more total space. For city core overall, it's pretty good considering a large amount of total space, better than most Midwest cites outside the Loop's Class A.

Suburban shows KC has more office construction than any Midwest city (mostly Cerner but others too). Suburban KC accounts for over 20% of Midwest suburban new office construction. Chicago only Midwest city that has a lot of downtown new office construction.

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Re: Downtown office vacancy 2016

Postby earthling » Tue Feb 14, 2017 1:34 pm

CBRE Q4/2016 Office report. Downtown Class A vacancy improves to 13.9% down from 15%. Is plausible when downtown Class A hits below 12% that developers may consider spec building, maybe. Would expect to hit better than 12% by summer. Colliers' Q4 report should be coming soon, they track many more buildings than CBRE.

Do these images show up? Might be cached for me.
Image

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Last edited by earthling on Tue Feb 14, 2017 3:42 pm, edited 1 time in total.

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Re: Downtown office vacancy 2016

Postby DaveKCMO » Tue Feb 14, 2017 2:09 pm

Is the 300K of space at crown Center considered class A?

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Re: Downtown office vacancy 2016

Postby earthling » Tue Feb 14, 2017 2:50 pm

^Not following you Dave, which space?


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