Morgan Stanley Unit Acquires Kansas City Distribution Facility

Investment funds managed by Morgan Stanley Real Estate Investing have acquired a newly developed, 1.5 million-square-foot distribution facility in Kansas City, Mo., for $158.5 million. The seller was Hunt Midwest, which developed the building and delivered it in July of last year.

The property is fully occupied on a long-term, net-lease basis by Ace Hardware, for which it was a build-to-suit. Ace Hardware is the world’s largest hardware cooperative, with more than 5,300 locally owned and operated stores across more than 60 countries.

The building is also the first phase at KCI 29 Logistics Park. This 3,300-acre project by Hunt Midwest, adjacent to Kansas City International Airport, will eventually support up to 20 million square feet of industrial facilities.

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The Ace Hardware building is a half mile from end-to-end, making it by footprint the largest distribution center in Kansas City. The structure features a cross-dock configuration and 40-foot clear height, according to Morgan Stanley.

The property was acquired in an off-market transaction facilitated by Newmark Zimmer President & CEO Mark Long and Executive Managing Director & Principal John Hassler.

Kansas City industrial picks up speed

Vacancy in the Kansas City metro industrial market saw a slight year-over-year decline to 4.7 percent in the second quarter, according to a report from Newmark Zimmer. Over the past 12 months, net absorption totaled 3.1 million square feet, which Newmark Zimmer cited as evidence that tenants are becoming less cautious, especially with regard to larger spaces.

In June, Sealy & Co. purchased the 498,599-square-foot, fully leased Raymore Commerce Center Building 2 in Raymore, Mo., a Kansas City suburb. The seller was VanTrust Real Estate, represented by Newmark.

And in July, a joint venture between BGO and Yukon Real Estate Partners sold New Century Cold Storage, a 291,000-square-foot cold storage facility in New Century, Kan. A MetLife Investment Management client was the buyer of the rail-served property, which had been built-to-suit for CJ Logistics America.