Millennials, Baby Boomers Fuel Apartment Growth In Kansas City
Apartment construction in metropolitan Kansas City is hitting levels not seen since before the Great Recession with more than 5,000 units expected to be completed by the end of this year.
Many of those projects are going up in downtown Kansas City and similar places such as old Overland Park, where developers say renters both young and old covet a walkable environment.
“You have a mix of millennials who want to be connected to life on the street and also the Baby Boomers who are renters by choice who want the same environment,” says Bob Galamba, senior vice president at Colliers International.
Colliers recently issued a reporton the Kansas City apartment market that projected 5,050 units would be completed this year, 22 percent more than the 4,141 units built in 2016.
That compares to a historical 10-year average of 1,800 units annually.
Will the trend continue?
“It’s the biggest influx Kansas City has seen at one time,” says Christina Boveri, a Realtor who has specialized in downtown residential for more than a decade.
“The demand is still high, but a lot of apartments are coming on line. It’ll be interesting to see how they’re all absorbed.”
Developers remain optimistic, saying the continued strong occupancy rates as well as growing rents signal the market can absorb even more units.
Colliers reports the metro average occupancy rate was 95 percent in the first quarter of this year, and rents increased 3.6 percent compared to a year ago, averaging $886 per month.
“The new projects are pretty well staggered,” says Galamba. “I think we’re OK, but I’m keeping an eye on it.”
Some of the larger projects in the works or recently completed:
- Commerce Tower, 342 units, downtown Kansas City.
- East 9 at the Pickwick Plaza, 259 units, downtown Kansas City.
- Summit and Apex at Quality Hill, 390 units, downtown Kansas City.
- Second and Delaware, 276 units, downtown Kansas City.
- 531 Grand, 140 units, downtown Kansas City.
- Crossroads Westside, 221 units, downtown Kansas City.
- Union/Berkley Riverfront Park, 410 units, downtown Kansas City.
- Two Light, 296 units, downtown Kansas City.
- 3435 Main, 80 units, midtown Kansas City
- Avenue 80, 220 units, old Overland Park.
- Kinsley Forest Apartments, 328 units, Clay County.
- Meadowbrook, 280 units, Prairie Village.
- The Royale at CityPlace, 344 units, south Overland Park.
And the pipeline keeps growing in other areas as well
Last month, Flaherty & Collins, an Indianapolis developer, was approved for tax incentives to build a $30 million, 225-unit apartment project in the West Bottoms called Stockyard Apartments. The firm also is developing the apartments by Berkley Riverfront Park.
In Westport, Opus Development is moving forward with a 256-unit development at Broadway and Westport Road, and another developer is proposing a 205-unit project called Westport Terrace at Manor Square.
And developer Ken Block is planning a 15-story, 288-unit project at 47th and Madison near the Country Club Plaza.
Developers try out new designs
Mac Properties, which has transformed the Armour Boulevard corridor in midtown over the last decade by renovating 28 historic buildings into more than 2,200 apartments, recently completed its first new-construction project.
The unique 3435 Main apartments at Main and Armour were constructed using modules built in Nebraska and then stacked Lego-style. The resulting five-story building has 80 apartments and the first tenants are now taking occupancy.
Architect Sean Slattery of el dorado says the modules arrived ready to be stacked with everything but the final coat of paint. The project already is 45 percent leased.
“It’s the first of its kind in the Midwest,” he says. “We hope it’s not a one-off, the advantages are apparent.”
Jim Thomas of Indianapolis-based Cityscape is behind both the Quality Hill and Crossroads Westside projects, totaling more than 600 units.
He believes downtown Kansas City still has ample capacity to absorb more apartments based on his experience in Indy, Cincinnati and Columbus, Ohio.
“Kansas City downtown is a little newer to the party in terms of embracing residential opportunities to some extent,” Thomas says.
“When you look at what’s worked in other cities, Kansas City is still in the first half of fully developing a downtown residential community.”
Jonathan Arnold is developing what he describes as the world’s largest “passive house” centered apartment building in the River Market.
His Second and Delaware project will use 90 percent less energy than a conventional apartment building and will feature rooftop gardens and heavily landscaped courtyard.
A desire for walkable neighborhoods
Arnold says there’s a huge pent-up demand for apartments in walkable neighborhoods.
“If you build every new building in Kansas City in walkable neighborhoods over the next 10 years, you’d still need more,” he says. “We have a lot of catching up to do because we sprawled so far and built a lot of auto-dependent units.”
That’s the formula that’s also working in and near the downtown area of old Overland Park where several projects totaling more than 650 apartments are underway.
Brenner Holland of Hunt Midwest, which is developing a 219-unit project called The Vue at 80th and Marty in old Overland Park, agrees walkability is the key ingredient.
“Old Overland Park is a unique kind of downtown environment that you don’t have in many suburbs,” he says. “It’s an eclectic blend of restaurants, shops and services, an old hometown square kind of feel.
“What’s been missing is the bodies who can walk out from the living unit to those services.”
Kevin Collison, a freelance contributor to KCUR 89.3, writes about downtown Kansas City for his website CityScene KC.