KCRag Forum

Will be interesting to see if demand continues. I don't have as much trust in Cushman numbers but they claim half of metro demand is in RCP corridor. Yardi shows metro demand slowing some in May relative to last year but no urban breakdown in public reports, a new report should come soon. Colliers hasn't reported multifamily for KC since Q3 last year - they show urban numbers so hopefully they'll update soon. Berkadia report should be coming soon but no longer doing urban breakout.

I could believe that. The inner city has a lot of demand for more housing.

Northmarq claims Downtown and Midtown vacancies above 12% in Q2. Cushman says around 6% in RCP corridor but they had a major margin of error compared to Q1, so questionable. If Northmarq directionally correct it implies that demand is not keeping up with supply so lowering demand or oversupply may be the major reason that construction starts slowed in urban core, not necessarily City denying incentives on a few projects.

The average vacancy is heavily affected by two submarkets, Downtown/East Kansas City and Midtown, where vacancy rates are
both above 12 percent. Excluding these two submarkets, the average vacancy rate is in the mid-4 percent range in the rest of the Kansas City area.

https://www.northmarq.com/wp-content/up ... 1Q2022.pdf

Yardi and Berkadia reports should be coming soon but they don't chart urban breakout, though may comment on it.

I don't know if this is accurate, shows recent status updates for various apt projects in Jackson County. If a signup popup appears, just X out of it upper right corner....
https://www.construction.com/projects/? ... =apartment

earthling wrote: ↑Fri Jul 29, 2022 6:51 am If Northmarq directionally correct it implies that demand is not keeping up with supply so lowering demand or oversupply may be the major reason that construction starts slowed in urban core, not necessarily City denying incentives on a few projects.

Just my 2 cents on downtown demand- I think downtown is overdue for a new boost of activities. The downtown streetcar, P&L, and the same few restaurants are getting old now and downtown needs more that. It was exciting during the 2010's- but this is a new decade now. And we need new attractions to keep downtown appealing and populating into the 2020's.

The good news is, that is happening.

The Royals coming down there will something new & exciting. The south loop cap will be like that too. So will the new riverfront stadium. And of course, a streetcar that goes to the Plaza will be an exciting boost. I'm sure more as well. These things will captivate more people wanting to be a part of this new exciting action that KC residents have never gotten to experience before- because that's what grew downtown in the 2010's, it was things we've never gotten to experience before.

The problem is all of that won't be completed till 2025-26. So it will be a few more years of the same downtown we've seen since 2016. And I think people have gotten really used to our downtown like this now and it's lost some of its appeal that it had in the 2010's when this was all new stuff for KC. We have to keep always doing more, and then demand will always grow.

Would be good to see more sources on demand trend but the lack of consistency/agreement across current reports are not reliable indicators. KC is a moderate growth market so it wouldn't be surprising if demand cycles in and out over time. Some reports have also mentioned urban core is also a little top heavy with new higher end units, though that was last year.

Chris S, do you have any recent feasibility studies that assess urban core demand trend? Usually they would be compiled for investors.

The way crime in all large urban areas is heading this wave of young people moving to cities may be coming to an end if they don't figure it out.

This country is so full of extremists right now (both sides of politics) that we are literally self destructing right now. Our cities are becoming lawless and uncivilized (just like our rural areas are uneducated and brainwashed.)

From STL Cushman report. KC metro projected to deliver over 5K units this year.

What does the /capita mean? Are these not just raw numbers?

GRID wrote: ↑Sat Jul 30, 2022 2:05 pm The way crime in all large urban areas is heading this wave of young people moving to cities may be coming to an end if they don't figure it out.

This country is so full of extremists right now (both sides of politics) that we are literally self destructing right now. Our cities are becoming lawless and uncivilized (just like our rural areas are uneducated and brainwashed.)

Yet the suburbs keep thriving.

Seriously, after the COVID shutdown, I started to refer to my family's J.C. Nichols redoubt as "morning in America" (the Ronald Reagan 1984 reelection theme). Zero traffic except the occasional lawn-care service. Joggers, walkers, and unleashed kids and dogs all day. Birdsong and crickets. It is still remarkably different than the Before Time.

I guess 90% of the traffic were office peeps trudging to the Plaza or downtown for work. That just completely vanished, at least on our road.

herrfrank wrote: ↑Tue Aug 02, 2022 1:52 pm

GRID wrote: ↑Sat Jul 30, 2022 2:05 pm The way crime in all large urban areas is heading this wave of young people moving to cities may be coming to an end if they don't figure it out.

This country is so full of extremists right now (both sides of politics) that we are literally self destructing right now. Our cities are becoming lawless and uncivilized (just like our rural areas are uneducated and brainwashed.)

Yet the suburbs keep thriving.

Seriously, after the COVID shutdown, I started to refer to my family's J.C. Nichols redoubt as "morning in America" (the Ronald Reagan 1984 reelection theme). Zero traffic except the occasional lawn-care service. Joggers, walkers, and unleashed kids and dogs all day. Birdsong and crickets. It is still remarkably different than the Before Time.

I guess 90% of the traffic were office peeps trudging to the Plaza or downtown for work. That just completely vanished, at least on our road.

I live in the city and I've noticed a crazy amount of traffic on the evenings and weekends. I've seen more people and cars in Westport and the Plaza than I've seen in years. Is there a chance that people that worked in these places and are now working from home miss them and want to go there when they might not have before? While I love the businesses employees getting lunch or shopping after work, I'd assume it's a better trade to have them spend more money on the weekend?

I would wager that if many people have been working from home for a while, they are getting stir-crazy being at home all the time. They want to go out on the weekends.

^My road is a (circuitous in my opinion) cut-through to the south Plaza from Prairie Village, so maybe that's why the traffic has been so absent during workdays. It used to be fifty cars per hour and now it's five.

I have noticed that Brookside is as busy as ever. I'll pay more attention to the Plaza next time I am down there. Are the big employers along 47th street (Bank of Montreal; CBIZ; Lockton) back in the office?

Berkadia latest KC multifamily report.
https://base.berkadia.com/wp-content/up ... s-City.pdf

Metro absorption (demand) is slower this year than last several years and forecasted to be even lower next year. For Central KC (mainly RCP corridor with some E Side), generally agrees with Cushman of about 95% occupancy (Northmarq claims only about 88%). On the lower right pipeline, the light blue is 'lease-ups', which is pretty low for Central KC.

Berkadia national report also claims significantly declining absorption/demand for US avg this year after abnormally high demand last year. The lease-ups in light blue to right include pre-leases but may also include several months after a new opening.

https://base.berkadia.com/wp-content/up ... tional.pdf

While recent lease-ups and demand may be down in Central KC, Berkadia says it still led annualized metro absorption, agreeing with Cushman. Both say relatively more demand on MO side in general.

Yardi Matrix's latest KC report says that metro demand/absorption is only slightly lower for June (past 12 months) compared to a year earlier. Berkadia forecasts this to decline further through rest of year.


https://www.yardimatrix.com/media/downl ... KansasCity

Berkadia Q2 pipeline report for KC metro. It shows Katz as 'prospective' yet is now under construction so several may be listed in wrong phase. Claims total of 45K units in the pipeline or recently completed. Yardi claims 48K units in development above.

https://base.berkadia.com/wp-content/up ... Report.pdf

Recent status updates of apt projects in Jackson County, unclear how accurate this site is...
https://www.construction.com/projects/? ... =apartment

Newmark questionably claims that Q2 KC metro demand over 12 months is greater than ATL and Tampa, 22nd highest. Yardi Matrix is considered most accurate and doesn't show KC quite that high with ATL higher, but here it is...

https://www.nmrk.com/storage-nmrk/uploa ... Report.pdf

July MF permits. KC metro fares pretty well with over 500 MF permits in July, might pickup moving forward with less friction in KCMO. Though depends on if demand slows down again through next year as is forecasted by Berkadia (a few posts back).



https://www.census.gov/construction/bps ... 202207.xls