Downtown Office Market still Weaker than the Burbs

[ShowMeKC]

Office market is stronger in suburbs, weaker Downtown

Kansas City's suburban office market strengthened in the second quarter while downtown vacancies climbed, Colliers International said.

 

These changes mirror national conditions reported by Colliers, but vacancy rates in Kansas City remained higher than national averages.

Suburban vacancies in Kansas City fell by 83,000 square feet, or 0.2 percentage points, in the second quarter to 20.7 percent, Colliers said in a written release. Downtown vacancies increased by 40,000 square feet, or 0.4 percentage points, during this time to 23.9 percent.

The suburban Kansas City market contains 30.2 million square feet, nearly three times as much as Downtown's 10.5 million square feet.

Job growth fueled a second-quarter reduction of 0.2 percentage points in national office vacancies to 15.9 percent. Suburban vacancies fell by 0.3 percentage points during the second quarter to 16.5 percent, and downtown vacancies increased by 0.1 percentage points to 14.9 percent.

Asking rates for Class A space in suburban Kansas City fell by 0.9 percent during the second quarter to $21.60 a square foot, and the rate for Class A downtown space in Kansas City rose by 1.2 percent to $21.40 a square foot.

Nationally, suburban rates rose by 0.7 percent to $23.60 a square foot, and downtown rates increased 0.7 percent to $33 a square foot.

Colliers said that slowing job growth could stall the national office market's recovery.