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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Re: Downtown office vacancy

Postby earthling » Wed Jan 10, 2018 5:51 pm

Ideally 5 Light continues as residential and the lots along 8th between Main/Central develops with hirise office/mixed (with perhaps a pedestrian retail shopping stretch closed to cars and garage access along 7th.). The 5 Light spot would have small floor plates as mentioned, not great for office.

In other news, DST might be sold. Could be bad news or good news for downtown workforce long term, too early to tell.
http://www.kansascity.com/news/business ... 90489.html

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Critical_Mass
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Re: Downtown office vacancy

Postby Critical_Mass » Wed Jan 10, 2018 6:36 pm

This person is saying 100-200K sf Class A being considered:
https://twitter.com/BrianHartleyKC/stat ... 2213676037

For comparison, H&R Block HQ next door is in the 500-600K sf range
https://www.hines.com/properties/hr-blo ... ansas-city
http://www.hok.com/design/region/united ... dquarters/

A lot of variables, but if it's a similar floorplate size to H&R....maybe 4 to 7 stories on top of the existing retail space (more if they are adding parking levels). Probably not in high-rise territory unless they're looking at more space.

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Re: Downtown office vacancy

Postby horizons82 » Wed Jan 10, 2018 7:26 pm

earthling wrote:Ideally 5 Light continues as residential and the lots along 8th between Main/Central develops with hirise office/mixed (with perhaps a pedestrian retail shopping stretch closed to cars and garage access along 7th.). The 5 Light spot would have small floor plates as mentioned, not great for office.


Based on the piling locations, the H&R 2 spot could have floor plates 38,000 - 43,000 sf. That's larger than One KC Place or TC Pavilion's typical floor. It'll work fine for office, even if it's half that.

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beautyfromashes
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Re: Downtown office vacancy

Postby beautyfromashes » Wed Jan 10, 2018 7:46 pm

It’s 3/4 of a city block: 13th to 14th, Main to Baltimore. Bigger than Block and plenty of space for commercial. Should be cheaper too since footings and piers already existing.

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Re: Downtown office vacancy

Postby DaveKCMO » Wed Jan 10, 2018 8:42 pm

ldai_phs wrote:Location West of HR Block being looked at for Class A office building. Guess this means no 5 Light :/


there is such a thing as vertically mixed use...

earthling
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Re: Downtown office vacancy

Postby earthling » Wed Jan 10, 2018 8:53 pm

beautyfromashes wrote:It’s 3/4 of a city block: 13th to 14th, Main to Baltimore. Bigger than Block and plenty of space for commercial. Should be cheaper too since footings and piers already existing.


Ah, I had locations mixed up.

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Re: Downtown office vacancy

Postby normalthings » Wed Jan 10, 2018 9:39 pm

DaveKCMO wrote:
ldai_phs wrote:Location West of HR Block being looked at for Class A office building. Guess this means no 5 Light :/


there is such a thing as vertically mixed use...

Such a progressive project did not even come to my mind. Would be exciting to see a vertical mixed-use tower there.

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Re: Downtown office vacancy

Postby earthling » Thu Jan 11, 2018 11:31 am

So it's official that DST is sold. They own a lot of buildings on W Side of Loop. They are expected to consolidate data centers and corporate functions in near term so likely a hit on jobs and possibly a building or two sold if not more eventually. That would put more space on market so of course decreasing chances of getting new office buildings built. The worst case scenario is most of DST operations in KC folded into the acquiring company, would of course be a major impact on many levels. Can only hope they find it cheaper to operate in KC than NY Metro...

https://www.bizjournals.com/kansascity/ ... stems.html

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normalthings
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Re: Downtown office vacancy

Postby normalthings » Thu Jan 11, 2018 4:31 pm

earthling wrote:So it's official that DST is sold. They own a lot of buildings on W Side of Loop. They are expected to consolidate data centers and corporate functions in near term so likely a hit on jobs and possibly a building or two sold if not more eventually. That would put more space on market so of course decreasing chances of getting new office buildings built. The worst case scenario is most of DST operations in KC folded into the acquiring company, would of course be a major impact on many levels. Can only hope they find it cheaper to operate in KC than NY Metro...

https://www.bizjournals.com/kansascity/news/
2018/01/11/ss-c-technologies-buys-dst-systems.html


Would be ideal if they buy DST and then move here. Maybe city needs to jump on incentives for that ASAP?

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Re: Downtown office vacancy

Postby tower » Thu Jan 11, 2018 5:40 pm

Maybe the CEO really, really, really likes BBQ. Or fountains. Or places that aren't Connecticut. That's a pretty strong combo.

In all seriousness though, that would probably be a first among corporate acquisitions if a company bought a rival and then move the HQ to where the rival was, halfway across the country.

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Re: Downtown office vacancy

Postby Highlander » Thu Jan 11, 2018 11:07 pm

earthling wrote:So it's official that DST is sold. They own a lot of buildings on W Side of Loop. They are expected to consolidate data centers and corporate functions in near term so likely a hit on jobs and possibly a building or two sold if not more eventually. That would put more space on market so of course decreasing chances of getting new office buildings built. The worst case scenario is most of DST operations in KC folded into the acquiring company, would of course be a major impact on many levels. Can only hope they find it cheaper to operate in KC than NY Metro...

https://www.bizjournals.com/kansascity/ ... stems.html


Losing these guys would be a huge blow to downtown KC. Mergers and acquisitions have been the bane of KC - we always seem to have the smaller company in mergers. It's a wonder sprint is still in KC after their merger a while back. I really doubt if a company in the line of business that DST is in would ever leave NY to come to KC. Wouldn't make much sense. Best hope is that they are allowed to operate as a separate unit independent of the parent company.

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Re: Downtown office vacancy

Postby LCDSI » Fri Jan 12, 2018 11:07 am

not sure if this was posted but in this latest posting on the cityscenekc site it's mentioned that there are discussions to build a new office building downtown.

In a related matter, Schulte told the Downtowners that H&R Block is teaming up with Copaken Brooks and Cordish to pursue a potential office tower project on the block southwest of 13th and Main


https://cityscenekc.com/three-light-con ... y-manager/

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Re: Downtown office vacancy

Postby earthling » Fri Jan 12, 2018 11:53 am

Missed that, so would that be on top of YardHouse? If so, great that was constructed in a way to allow hirise on top.

BTW, I mentioned to Collison (CityScene) that he should setup PayPal or other form to allow supporting his site. He mentioned he was planning to look for investors after 6 months. Well it's been 6 months. We could help him out by clicking on his site often and leaving comments...
https://cityscenekc.com/

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Re: Downtown office vacancy

Postby normalthings » Fri Jan 12, 2018 11:54 am

LCDSI wrote:not sure if this was posted but in this latest posting on the cityscenekc site it's mentioned that there are discussions to build a new office building downtown.

In a related matter, Schulte told the Downtowners that H&R Block is teaming up with Copaken Brooks and Cordish to pursue a potential office tower project on the block southwest of 13th and Main


https://cityscenekc.com/three-light-con ... y-manager/

5 Light Site. May be mixed use project

earthling
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Re: Downtown office vacancy

Postby earthling » Fri Jan 12, 2018 12:00 pm

Highlander wrote:
earthling wrote:So it's official that DST is sold. They own a lot of buildings on W Side of Loop. They are expected to consolidate data centers and corporate functions in near term so likely a hit on jobs and possibly a building or two sold if not more eventually. That would put more space on market so of course decreasing chances of getting new office buildings built. The worst case scenario is most of DST operations in KC folded into the acquiring company, would of course be a major impact on many levels. Can only hope they find it cheaper to operate in KC than NY Metro...

https://www.bizjournals.com/kansascity/ ... stems.html


Losing these guys would be a huge blow to downtown KC. Mergers and acquisitions have been the bane of KC - we always seem to have the smaller company in mergers. It's a wonder sprint is still in KC after their merger a while back. I really doubt if a company in the line of business that DST is in would ever leave NY to come to KC. Wouldn't make much sense. Best hope is that they are allowed to operate as a separate unit independent of the parent company.


Yeah KC is more often on the losing side of M&As. There are some DST divisions that may be divested so some parts may still stay, like the health side. And there could still be some operations on the funds side but from what I understand the buyer is much further along with ETFs. My guess is that more than half of DST presence downtown could be at risk, maybe much higher. But some companies that buy KC companies do find it's cheaper to operate here and grow certain functions/operations. As far as moving acquiring HQ to KC, yeah unlikely.

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Re: Downtown office vacancy

Postby earthling » Tue Jan 16, 2018 11:40 am

Summary of various office transactions in 2017 and major downtown leases...
https://www.bizjournals.com/kansascity/ ... i/10643016

MARC projects near 20K job growth this year, which is more than 2017 but not quite as good as actual 2014/15/16 pace, well over 20K each. KC's pro biz growth in 2017 was way above national avg though, closer to hot markets in % growth, and with a good pace so could help improve office market. KC metro used to be considered overbuilt with office space, not the case anymore with low vacancies - and that could help downtown though DST sale could offset things.

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Re: Downtown office vacancy

Postby earthling » Sun May 20, 2018 12:38 pm

Colliers hasn't released Q1/2018 office market stats yet but at the end of 2017 KC metro was a top performer with vacancy improvement and absorption for the year, as well as better than avg % vacancy. KC and Seattle had the best vacancy improvement (about 2% drop).

Through all of 2017, Colliers says Downtown to Plaza KC absorbed more space than any Midwest 'downtown' including Chicago/MSP and about same as Denver/Atlanta (page 10). But Nashville is really hot, moreso than Seattle. This Colliers report tends to call greater urban area 'downtown' for most markets - for KC it includes Midtown/Plaza.

KC burbs absorbed nearly 1.4M sqft of office space (page 14, YTD 2017 column), nearly double Chicago burbs and more than most markets, up there with hot markets. Obviously Cerner a factor but this is still pretty substantial considering KC metro has a lot of office space for its size with such low vacancy. Downtown CBD still probably not where it should be for Class A vacancy, will see when Q1/2018 report comes out.

https://www2.colliers.com/-/media/Files ... liers.ashx


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