Speculative industrial development pays off in Johnson County

Research from global real estate firm Cushman & Wakefield indicates that vacancy rates for industrial space in the Kansas City area has plunged below 8 percent.

An astute observer in Johnson County could reasonably ask how that’s possible, given the glut of speculative industrial development in the southern reaches of the market.

The answer is that the vacancy rate has dropped in large part due to the run of speculative development, which has been met with strong demand from out-of-town companies.

In all, 6.6 million square feet of available industrial space in the Kansas City area has been leased since 2015, bringing vacancy rates to 7.54 percent as of the second quarter of this year.

Developers have built 7.3 million square feet of industrial space in the area since the beginning of 2015. Of that, 3 million square feet was built in Johnson County.

Mike Mayer, managing principal of Cushman & Wakefield’s Kansas City office, said speculative development has attracted big-box users from outside of Kansas City.

Amazon’s decision earlier this year to lease 822,000 square feet for a fulfillment center at the Inland Port XIV building in Edgerton, stands out as a key example of a large corporation seeking out the immediate availablity of industrial space in Johnson County.

“That’s intense out-of-town activity” Mayer said. “It’s unprecedented.”

This story was originally published July 19, 2016 at 1:18 PM with the headline "Speculative industrial development pays off in Johnson County."