Downtown office vacancy

[earthling]

Even with warmer weather, office vacancy struggles to break 50%. Guessing spring break vacations and recent holidays are playing a big part

^At least with the larger markets. It's not so bad in mid/small markets. During height of pandemic, was expecting 15%-20% hybrid/remote by today but after so many got the taste of remote it appears to be here longer term for a higher % than expected. And many biz were forced to invest into making remote access work along with HR remote onboarding processes during pandemic so the IT infrastructure and processes already there makes it easier to continue.

[Cratedigger]

Even with warmer weather, office vacancy struggles to break 50%. Guessing spring break vacations and recent holidays are playing a big part

^At least with the larger markets. It's not so bad in mid/small markets. During height of pandemic, was expecting 15%-20% hybrid/remote by today but after so many got the taste of remote it appears to be here longer term for a higher % than expected. And many biz were forced to invest into making remote access work along with HR remote onboarding processes during pandemic so the IT infrastructure and processes already there makes it easier to continue.

Yeah that checks out. Is there a way to drill down and get a better sense of where KC falls on this?

Anecdotally, downtown KC feels dead during the week and I don't see a lot of regular office activity. But I wasn't here prior to Covid so I don't have a baseline for where things were prior to widespread remote work

[earthling]

I haven't seen any Kastle like stat for KC but office vacancy downtown still not looking great.

CBRE Q1 report shows downtown Class A vacancy still high and the highest negative absorption in metro...
https://sprcdn-assets.sprinklr.com/2299 ... 810751.pdf

[GRID]

Even with warmer weather, office vacancy struggles to break 50%. Guessing spring break vacations and recent holidays are playing a big part

^At least with the larger markets. It's not so bad in mid/small markets. During height of pandemic, was expecting 15%-20% hybrid/remote by today but after so many got the taste of remote it appears to be here longer term for a higher % than expected. And many biz were forced to invest into making remote access work along with HR remote onboarding processes during pandemic so the IT infrastructure and processes already there makes it easier to continue.

Yeah that checks out. Is there a way to drill down and get a better sense of where KC falls on this?

Anecdotally, downtown KC feels dead during the week and I don't see a lot of regular office activity. But I wasn't here prior to Covid so I don't have a baseline for where things were prior to widespread remote work

Downtown KC was really busy during the day in the 80's. All those buildings were office and filled up and used. Before all the companies started really moving to JoCo and when there was way more office space. Downtown streets had a real rush hour full of cars and buses and people crossing the streets. I mean Grand would be lined with city buses from 3-5:30. After six it was a ghost town. Nobody.

Now it's just kind of the same all the time during the day and evenings/weekends. Just peaceful. Not empty but not really busy either. Just random people walking around here and there. If there are a lot of events going on, it can get pretty busy (like first friday, multiple events at venues etc).

I don't see any more office space going up in KC. The only people putting up office space are single use HQ type buildings and KC has so little of that especially in the center city. Just keep concentrating on residential and hotels an cultural attractions and companies will slowly come back and probably just fill existing space.

[Cratedigger]

Found some data. Downtown Kansas City ranked 56th out of 63 North American metros for recovery of activity levels since the pandemic, according to research from the University of Toronto. The study examined mobile phone data from December to February, with Kansas City reaching 46% of the activity level for the same period in 2019.

http://downtownrecovery.com/dashboards/ ... nking.html

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

KC's higher than a few peer cities, but this confirms what I've seen anecdotally. Additionally, the study only measured activity levels from December to February, so it is possible that people just didn't want to go downtown when it was cold. Looking forward to seeing data from spring and summer.

[KCPowercat]

Found some data. Downtown Kansas City ranked 56th out of 63 North American metros for recovery of activity levels since the pandemic, according to research from the University of Toronto. The study examined mobile phone data from December to February, with Kansas City reaching 46% of the activity level for the same period in 2019.

http://downtownrecovery.com/dashboards/ ... nking.html

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

KC's higher than a few peer cities, but this confirms what I've seen anecdotally. Additionally, the study only measured activity levels from December to February, so it is possible that people just didn't want to go downtown when it was cold. Looking forward to seeing data from spring and summer.

I feel like maybe that's been linked here before but either way thanks for posting it. Very cool. Last summer we were 34th.

[Cratedigger]

Office occupancy still struggling to break 50%

[moderne]

KC Star carrying article on Chicago DT vacancy problems. City overall office vacancy 22.4%. Retail vacancy on the Magnificent Mile at 29% with Water Tower Place mall 39% empty. Sounds like CC Plaza problems not unique.

[beautyfromashes]

KC Star carrying article on Chicago DT vacancy problems. City overall office vacancy 22.4%. Retail vacancy on the Magnificent Mile at 29% with Water Tower Place mall 39% empty. Sounds like CC Plaza problems not unique.

Protests, while many times necessary, tend to scare off retailers.

[im2kull]

KC Star carrying article on Chicago DT vacancy problems. City overall office vacancy 22.4%. Retail vacancy on the Magnificent Mile at 29% with Water Tower Place mall 39% empty. Sounds like CC Plaza problems not unique.

Protests, while many times necessary, tend to scare off retailers.

Crime in general scares off retailers. Nobody wants their business being ransacked, windows broken, fires lit, and then having to deal with the cleanup, the shutdown, and the loss of a "safe" image to promote to potential patrons. Patrons no longer interested in the area as a whole. To have a business in an area with crime is not something any wise business owner would entertain. It's not a winning combination.

The plaza has been viewed as unsafe after dark, and crime-friendly for the last 15 years now. When Sly James was there during a shooting and the police were powerless to stop that shooting and the flash mobs, that signaled the beginning of the end. The plaza has lost esteemed retailer after retailer since, and replaced them with Claire's or empty storefronts.

[Cratedigger]

https://cityscenekc.com/crown-center-la ... vironment/

From CityScene today:

Statistics indicate the downtown Kansas City office market is a leader in the nation when it comes to employees returning to the office after the disruptions of the Covid pandemic.

Tommy Wilson, director of business recruitment and research for the Downtown Council, said Kansas City ranked sixth among 26 cities with 74 percent of its workforce back in the office.

I have no idea where those numbers come from or what the 26 cities chosen were. Or what defines “back in the office.” Maybe someone who was at the event could clarify?

For reference, this was Kastle systems most recent occupancy by day of week in 10 cities around the nation.

[Cratedigger]

https://www.metrowiremedia.com/news/off ... ancy-rates

The panelists all agreed that one year from now overall vacancy rates will be higher.

Relying upon information from the Kansas City Area Development Council (KCADC), Fagan said between March 2020 and recently, Kansas City has had the lowest amount of inquiries and success with out-of-market office tenants than this market ever has had.

“We have had the most industrial influx and the least office,” he said.

Well... that's not ideal.

[KCPowercat]

https://downtownrecovery.com/charts/ran ... stream=top

[Cratedigger]

https://downtownrecovery.com/charts/ran ... stream=top

Wow... STL is in last place of the 66 metros with 53%. Yikes

KC at 74% is nice but the downtowns they define are still very limiting.

[KCPowercat]

Yeah that's entirely too restrictive to even be good data.

[kcjak]

What's laughable is that the key metric used to determine recovery is electronic device usage.

[Cratedigger]

What's laughable is that the key metric used to determine recovery is electronic device usage.

Idk I think it's a pretty good measure of tracking where people are. To the point where even Chief Justice Roberts of the Supreme Court observed that cell phones “are now such a pervasive and insistent part of daily life that the proverbial visitor from Mars might conclude they were an important feature of human anatomy.”

[KCPowercat]

Yeah I felt the metric is a good one. The geography seems wrong for KC but makes sense in their methodology. It was focused more on office versus all downtown usage

[kcjak]

As a numbers guy, I find the data less than desirable. They moved from two data sources to one. And that data source is mobile device usage that includes anyone that is driving through downtown on the freeway. What does the data say about someone going taking the shuttle to the airport and doing some work on the way while the shuttle is stuck in traffic and the passenger has a cell phone, smart watch and tablet all using mobile data at that time. But the next day a similar person and their devices aren't counted because the Bond Bridge is closed for construction and the shuttle goes around to 635? No thanks.

[earthling]

https://mktgdocs.cbre.com/2299/b0d83c64 ... 056033.pdf