Inside Industrial: Kansas City’s Build-to-Suit Wave
JLL’s Kansas City team talks with CPE's Diana Firtea about the region’s industrial development outlook.
Kansas City’s industrial market has seen a meaningful share of new deliveries translate directly into occupancy, with build-to-suit activity playing an outsized role in recent absorption.
In the third episode of Inside Industrial, JLL’s Kevin Wilkerson and Phil Algrim joined CPE’s Diana Firtea to discuss how disciplined development, competition for sites and power availability are influencing Kansas City’s next phase of industrial growth.
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Wilkerson pointed to a string of large build-to-suit deliveries completed over the last 12 to 18 months, including projects for Ace, Amazon, Church & Dwight, Blue Buffalo, McKesson and Pimco Bakeries.
The guests also noted that speculative development has remained disciplined, with a limited pool of active developers and rising competition for development-ready land. They described how data center demand has pushed some land pricing above levels that industrial projects can underwrite, adding another variable for developers trying to pencil new starts.
On feasibility, they cited Kansas City’s strong electrical grid for traditional industrial uses, but said power constraints become more complex for manufacturing and data center projects, where Evergy’s energy study process can add meaningful cost and time early in site selection.
Here’s a summary of the discussion:
- (01:15) Build-to-suit deliveries driving absorption, with recent examples across the metro
- (02:05) Why development has stayed disciplined, with a limited set of active builders
- (03:10) How labor pockets and specialized requirements have influenced build-to-suit decisions
- (04:30) What is limiting additional construction: development-ready sites, new capital learning the market, land competition from data centers
- (06:15) Infrastructure and the electrical grid, including where power becomes a constraint
- (07:15) Evergy feasibility studies, timelines and how they shape early site selection for higher-power uses
- (08:25) Underwriting sensitivities: exit caps, construction pricing and rent trends
- (10:25) Demand bands to watch, including the 200,000 to 350,000-square-foot range and the outlook for larger boxes
- (11:35) What could alter the trajectory: pockets at risk of running short on spec space, plus caution around a potential wave of starts in Johnson County
- (13:30) Why Kansas City remains in the mix for regional requirements: diversified demand, central location, rail connectivity and incentives
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Music credit: Meeting with the Sun via stocktune.com
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