With more than 330 million square feet of industrial space in its footprint, Kansas City ranks as the 15th-largest industrial market in the United States. The region experienced substantial construction growth during Q3 2023 to keep pace with high demand, making it a top contender for future industrial investments.

Several buildings with more than one million square feet of availability, coupled with consistent project activity, position the region well to meet rising demand while maintaining a low vacancy rate.

HOW THE KC MARKET OUTPACED OTHER REGIONS IN Q3 2023

Accelerating Construction Activity: 

• Construction maintained an upward trajectory as the demand for industrial space accelerated to 4.2 million square feet. (Newmark Q3 2023 report). 
• More than 3.4 million square feet of new space was completed, while an additional 2.7 million square feet broke ground. At the end of the quarter, 6.4 million square feet of space remained under construction with nearly 20% of it pre-leased (CBRE Q3 2023 Report).

Sustained Vacancy: 

• Speculative development activity surged to a record level in the past few years; however, absorption has kept pace since the start of 2022 (CBRE Q3 2023 Report).

• Following the delivery of new construction to the market, there’s a temporary rise in the vacancy rate which is now 4.9%, but overall its projected to remain low in the coming months due to sustained demand (Newmark Q3 2023 report). 

Growing Absorption: 

• Leasing activity remains strong as absorption in the Kansas City metro rose to nearly 20 million square feet absorbed over the past two years (JLL Q3 2023 Report). 
• Year-to-date absorption measured at 5.3 million square feet and new deliveries are at 6.9 million square feet for the year (Cushman & Wakefield Q3 2023 report). 

Kansas City will remain one of the top industrial markets in the country due to the market’s continued sector strengths, central location, skilled labor force, extensive transportation network and reasonable costs for space and energy.

Learn more about the Kansas City region industrial market.