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

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Office return trying to inch its way back up but still generally flat last few months. At least according to...
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Re: Downtown office vacancy

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Cushman Q2/2022 office report for KC metro. They don't track as much space as other reports.

CC/Xroads area had most absorption in metro though not much and still high vacancy. S JoCo took another big hit this Q with >1M sqft hit so far this year. Metro as a whole took a -400K hit, rising to over 20% vacancy. Many other markets also showing a negative absorption hit for Q2.

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Re: Downtown office vacancy

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earthling wrote: Tue Jun 28, 2022 9:46 am Office return trying to inch its way back up but still generally flat last few months. At least according to...
I've been wondering since this trend has been going for a while now, is business starting to revert to the urban core and away from the far-flung suburbs in the KC metro?
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Re: Downtown office vacancy

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^Not necessarily correlated, you quoted from an older comment on Q1 reports. Q2 now shows overall urban core negative absorption, at least this report. There are lots of factors like remote work impact and rethinking office use. CC/Xroads showed slight improvement but still high vacancy.
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Re: Downtown office vacancy

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There was a story on fox4 last night about companies wanting to be where amenities are like downtown. They had some commerical real estate agent giving quotes.
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Re: Downtown office vacancy

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Yeah there's the 'flight to quality' trend for better spaces/location but tends to be less net space. Downtown is doing better than JoCo but still not exactly significant recovery. Let's see what other reports say. JLL, Newmark and CBRE should be coming soon.
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Re: Downtown office vacancy

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JLL Q2 report. Generally inline with Cushman report. S JoCo took biggest hit especially with Class A though N JoCo Class B got some absorption. Urban Core still taking a negative absorption hit, mainly Class A unfortunately. JLL not showing 'flight to quality' trend for KC as Class A took bigger hit, Cushman shows Class B took bigger hit but they don't track as much space. Even if flight to quality is happening in some cases, there's other reductions outpacing it, at least according to this report.

Looking at other JLL markets, many also show negative absorption especially downtowns. Downtown Minneapolis taking one of largest hits.

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https://www.us.jll.com/content/dam/jll- ... s-city.pdf
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Re: Downtown office vacancy

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Cushman National Q2 report. Vacancies continue to climb as most of country still experiences negative absorption outside the South. More markets hit over 20% vacancy including now KC and Denver (though JLL shows about 16% for KC above). Over 15 markets with over 20% vacancy according to Cushman. MSP/Twin Cities shows over 25% now along with Houston.

https://cw-gbl-gws-prod.azureedge.net/- ... c1181e810d
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Re: Downtown office vacancy

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JLL National Q2 report. Agrees with Cushman that negative absorption worse in Q2 than in Q1. Shows much different range of vacancies per market compared to Cushman but JLL and Cushman partly track different kinds of buildings.

https://www.us.jll.com/content/dam/jll- ... utlook.pdf
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Re: Downtown office vacancy

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This would seem to indicate KCMO is not on the winning side of attracting remote workers. Cerner posting over 75% of local jobs as able to work in other markets isn't helping. Even 30% would be concerning.
Fitch Ratings, earlier this week, affirmed its negative rating of Kansas City, Missouri, flagging remote work as a credit risk. The city anticipates a slow recovery in earnings taxes -- which is its largest source of general fund revenue -- because of increased remote work, Fitch noted.
https://www.bloomberg.com/news/articles ... issue-debt
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Re: Downtown office vacancy

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Chownow has been laying staff off. Crossroads office impacted
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Re: Downtown office vacancy

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Looking at ChowNow job postings they are only showing for the HQ location in LA or "remote". It wouldn't be surprising if they shut down the KC regional physical office or move to flex space and remaining KC employees are 'remote' based out of LA HQ..
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Re: Downtown office vacancy

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Amazon is pausing their office buildout in Nashville yesterday. It's getting pummeled all over the place.
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Re: Downtown office vacancy

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Downtown Denver is interesting. They haven't had as bad negative absorption as other markets but in addition to 1.2M sqft of new space added there's also "sub-leasing" from active tenants who don't need the space. DT Denver's Class A 'available' space has gone from about 15% to 24% in two years. Class B/C even worse. This of course isn't going to improve until remote/hybrid trend subsides and so far there isn't any indication it will get to 'normal' levels.

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Re: Downtown office vacancy

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normalthings wrote: Sun Jul 17, 2022 10:53 am Chownow has been laying staff off. Crossroads office impacted
Have used Chownow to try and order Gates for larger parties a few times. They never show the order when I get there and have to make it on the spot. Not sure if it's a problem with Chownow or Gates. Probably the later.
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Re: Downtown office vacancy

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beautyfromashes wrote: Sun Jul 17, 2022 5:25 pm
normalthings wrote: Sun Jul 17, 2022 10:53 am Chownow has been laying staff off. Crossroads office impacted
Have used Chownow to try and order Gates for larger parties a few times. They never show the order when I get there and have to make it on the spot. Not sure if it's a problem with Chownow or Gates. Probably the later.
Have used chownow and rarely have issues. However, have noticed that most restaurants I want to order from do not use it. Additionally, the number has declined over the past year or so.
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Re: Downtown office vacancy

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earthling wrote: Sun Jul 17, 2022 7:40 am This would seem to indicate KCMO is not on the winning side of attracting remote workers. Cerner posting over 75% of local jobs as able to work in other markets isn't helping. Even 30% would be concerning.
Fitch Ratings, earlier this week, affirmed its negative rating of Kansas City, Missouri, flagging remote work as a credit risk. The city anticipates a slow recovery in earnings taxes -- which is its largest source of general fund revenue -- because of increased remote work, Fitch noted.
https://www.bloomberg.com/news/articles ... issue-debt
Seems it's more regarding our reliance on city income tax. I don't think it indicates we are any worse or better at attracting remote workers.
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Re: Downtown office vacancy

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Fitch is curiously specific about it being remote related and it's probably not hard to measure reason for change in tax base. But they could be wrong. Any single source needs to be taken with grain of salt but I'm not aware of multiple that track KC's remote impact.
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Re: Downtown office vacancy

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CBRE Q2 report. Generally agrees with JLL/Cushman that S JoCo taking biggest negative absorption hit, Black&Veatch vacated 200K space. Downtown still taking small hits though and when including subleasing and other factors, downtown Class A availability is at a not so good 25%.

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https://www.cbre.com/insights/figures/k ... oad-report
Last edited by earthling on Wed Jul 20, 2022 7:04 am, edited 1 time in total.
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Re: Downtown office vacancy

Post by KCPowercat »

earthling wrote: Wed Jul 20, 2022 6:32 am Fitch is curiously specific about it being remote related and it's probably not hard to measure reason for change in tax base. But they could be wrong. Any single source needs to be taken with grain of salt but I'm not aware of multiple that track KC's remote impact.
I'm not saying they are wrong I'm saying remote work is impacting all cities and the specific credit risk is because that remote work could impact KCMO more because of it reliance on the 1%.
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