No hurdle too high for KC'S transformative mixed-use developments

“Doing any development today is really hard. Challenges on construction costs, challenges on financing. Doing mixed-use is a whole other level of hard,” said Michael VanBuskirk, SIOR, CCIM, CRE, vice chairman and principal at Newmark Zimmer.

Yet, several substantially sized and transformative mixed-use projects are underway across the Kansas City market.

VanBuskirk was joined by panelists Brandon Brensing, VP of real estate development at Ryan Companies US, Inc.; Grant Curtin, principal and VP at Curtin Property Company; Dan Horn, development manager at IAS Partners, Ltd.; Holly Rome, EVP, national retail leasing at JLL; and Scott Rosemann, P.E., F.SEI, LEED AP, COO at Rosemann & Associates, P.C. at MetroWire Media Kansas City’s Mixed-Use Masterpieces program last week. Erin Rosenthal, P.E., president at PMA Engineering, moderated.

The panelists discussed some of the current area projects as well as the challenges and insights for creating successful and visionary mixed-use projects.

Above: MWM KC Mixed-Use Masterpieces panelists (L to R): Holly Rome of JLL, Brandon Brensing of Ryan Companies US Inc., and Scott Rosemann of Rosemann & Associates P.C. discuss the challenges and timelines for mixed-use developments in KC. Photo credit: Jacia Phillips | Arch Photo KC

One of those projects is Bluhawk, a 277-acre mixed-use project in south Overland Park, Kansas, a large portion of which already is completed. The project includes 380 residential units, AdventHealth South Overland Park Hospital, office and retail. A 420,000 SF sports complex will open later this year.

Another is Discovery Park in Lee’s Summit, Missouri, a 268-acre project.

“We’ve taken the live, work, play and we’ve added stay in there. We’ve got two hotels in our first phase . . . and then medical office was a piece of it because we looked at how close we were to all the regional hospitals, and Lee’s Summit is a medical hub. And then the entertainment piece. . . . We looked at the opportunity to make this a regional destination,” said VanBuskirk.

While Bluhawk and Discovery Park are creating new developments where there were none, some major adaptive reuse and redevelopment projects also are underway.

One is the redevelopment of the former site of the Metro North Mall in the Northland, which is a 106-acre mixed-use development called Metro North Crossing.

“For mall redevelopments in particular, in our experience, the thing we’ve had going for us from day one at Metro North is although the mall became obsolete, the real estate that it sat on is still awesome.  We are right at the corner of two highways—169 and 152—right in the middle of the Northland,” said Horn.

Another project in Overland Park is the redevelopment of the Brookridge Golf Course, a 200-acre site being developed by Curtin Property Company. According to Curtain, the project, called Meridian, will feature 2,000 units of multifamily, two million SF of office, retail, food and beverage, entertainment, several hotels and green space. Once completed, the project will retain 18 holes of golf and have a health and wellness focus.

Above: MWM KC attendees enjoy breakfast and coffee while listening in on the panel discussion moderated by Erin Rosenthal of PMA Engineering. Photo credit: Jacia Phillips | Arch Photo KC

Mixed-use projects help to satisfy housing demand, which remains high, Brensing said.

“Kansas City has fared fairly well when it comes to rents, absorption, vacancies and those kinds of standpoints. We’ve seen about a 2.9 percent year over year rent increase. With a limited amount of supply coming onboard, we expect that number to increase through the remainder of the year and potentially into 2025.. . . And we’re going to continue to see a lot of growth not only in class A, but also the class B multifamily,” said Brensing.

VanBuskirk said Kansas City’s retail market is very strong. And although office vacancy in Kansas City is pushing 18 percent, office is doing well in mixed-use projects, he said.

“As we do these projects, we incorporate office into it as a very important critical component to have success,” said VanBuskirk.

The panelists discussed the importance of placemaking in mixed-use projects.

“What it does is it creates an authenticity. It creates a connection to the community. And, it creates a vibrancy in the development. And it’s not just one thing that makes that place that you want to go to. It’s everything that’s put together. It’s the architecture. It’s the landscaping. It’s what retailers you put in there. . . . So, it’s very purposeful and intentional,” Rome said.

“Placemaking is huge. There’s no doubt about it. And the thing that we caution all our developers is placemaking happens, whether you mean for it to or not. Every development is making your place whether you know it or not,” Rosemann said.

According to Horn, another critical element to the success of a mixed-use project is understanding up front what the specific community in which a developer is putting a project wants and what the community is missing.

“Every trade area in Kansas City is a little bit different,” Horn said.

“Talk with your city officials. Understand what they are looking for,” said Brensing.

Above (L to R): Deb Blaylock, Karen Saper and Jason Osborne network at MWM KC’s Mixed-Use event. Photo credit: Jacia Phillips | Arch Photo KC

Mixed-use projects present financing challenges, and although lenders and financing sources are less leery of these projects than they once were, many mixed-use projects would not happen without including a public private partnership component, Curtain said.

“It’s really difficult to make financial sense without the public’s side of investment in the project, whether it be property tax abatement or sales tax incentives and things of that nature,” said Horn.

According to Rosemann, it is important to include current architecture and design trends in mixed-use projects because that’s what tenants and shoppers expect. Design trends today include pet-friendly amenities and places on site to create an “Instagram moment.”

Rosemann also said being nimble and flexible in designing mixed-use spaces is crucial.

“If there’s one thing COVID and everybody being forced to go home taught us, it is that we end up using our spaces in the life of a building in ways that we really, really can’t envision now. So how do we give some thought to a space that can be used multiple ways, whether that’s today or five or 10 years from now,” he said.

“We’re really getting creative with these developments to get people to work there, live there, play there,” Rosenthal said.

Kansas City’s mixed-use market is faring well.

“I would say the fact that we have everyone here at the table talking about the size of the projects we’re talking about tells you how Kansas City is doing. And, that’s very well,” said VanBuskirk.

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Feature photo credit: Jacia Phillips | Arch Photo KC

View the complete event photo album by Arch Photo KC here

PepsiCo joins Logistics Park Kansas City

PepsiCo Global will soon be moving into the state-of-the-art Inland Port VII building at Logistics Park Kansas City (LPKC), a 3,000-acre, master-planned distribution and warehouse development in Edgerton, Kan.

“PepsiCo chose Edgerton and LPKC because they can see the clear advantages of locating at the premiere logistics and distribution center in the Midwest,” said Edgerton Mayor Donald Roberts.

PepsiCo signed a lease for the 952,956-SF space, where the global food and beverage company plans to distribute their popular Gatorade product line.

“PepsiCo/Gatorade is an excellent addition to the Edgerton business community. LPKC is a convenient, versatile hub that can meet the needs of any company’s supply chain. Edgerton’s proximity to key services and partners is one of the main reasons businesses experience success at LPKC,” said ElevateEdgerton! president, James Oltman.

Built by Northpoint Development, the facility was the largest speculative building in the Kansas City metro and in the state of Kansas when it was completed earlier this year. JLL managing director, Kevin Wilkerson, and executive vice president, Phil Algrim, represented NorthPoint in the negotiation.

“Inland Port VII is the latest delivery in a long line of industry leading logistics products, bringing together accessibility to quality labor and cutting-edge technology in one centralized location,” Wilkerson said.

Since 2013, LPKC has amassed over 14.4 million SF of industrial space for over twenty tenants; work has already started on the next spec industrial building at LPKC.

About PepsiCo: PepsiCo products are enjoyed by consumers more than one billion times a day in more than 200 countries and territories around the world. PepsiCo generated more than $67 billion in net revenue in 2019, driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages, including 23 brands that generate more than $1 billion each in estimated annual retail sales.

JLL's Anné Erickson shares, reimagines what's next for CRE

In this week’s MWM Broker Spotlight, we’re featuring a bright and talented commercial real estate associate in the Jones Lang LaSalle (JLL) Kansas City office - meet Anné Erickson. Erickson maintains a strong passion in her CRE career by bringing together different ideas, people and companies - all in an effort to benefit her clients.

Erickson grew up in the real estate business watching her family invest in real estate across the KC metro since the day US Route 69 came through their family farm just southwest of Corporate Woods. This experience fascinated Erickson, especially from a business perspective of value generation in owning properties and the development activities that took place thereafter.

RT: Tell us more about you and your career, Anné! What first sparked your interest in commercial real estate?

AE: Early in my career, I worked overseas directing investment research projects on emerging global economies. No matter the country, real estate was a central part of this work and how foreign investors can invest in the construction and real estate sector. Like many who were involved in our family real estate through the years, it is to no one’s surprise that I landed my career in commercial real estate.

RT: What excites you about your day-to-day career?

AE: Being let in ‘under the tent’ with clients and prospects. I focus my business in tenant representation, working with the actual company leasing or purchasing property. My job is to understand what my clients are going through from an operational standpoint to identify commercial real estate solutions that will compliment and impact their business plans. It’s not just about finding them a space; it’s about using real estate as a tool to advance their business. The diversity of getting to know different leaders and business sectors in Kansas City keeps it fresh and exciting to me.

RT: What leads do you look for?

AE: I represent businesses looking for real estate. Our team is the tenant representation leader in Kansas City because of our strengths in occupancy planning and financial analysis. And yes, being a rare female in a male-dominated industry, it’s always fun to work with Kansas City’s incredible women-owned businesses!

RT: Can you share how you keep your skills sharp in this competitive industry?

AE: It is important to focus on what skills are unique to you and your team and become the expert in your focus area. The pandemic has made this even more important as businesses are looking to us to figure out what is next. I specialize in occupancy planning as it impacts employee attraction, retention, morale, and overall business effectiveness with office users. In addition to the basic cost of real estate, there are very substantial monetary impacts related to employee productivity, satisfaction and attrition that have a direct relationship with the work environment.

These topics need to also be addressed and considered in the real estate analysis because a 10% increase in workplace staff productivity or a lowering of employee attrition by 5% often can have far more financial impact on your bottom line than saving $0.50 off your base rent.

RT: What’s your vision and advice for a successful CRE industry moving forward?

AE: We can no longer look to the past to understand how business success will be achieved in the future. Every organization must examine the priority areas of their business and begin to “reimagine’ all aspects of business in the context of the new normal. C-Suite teams who successfully reimagine business today will be tomorrow’s business leaders.

I expect the Kansas City real estate market will rebound likely faster than many larger cities in the US. I believe that will be in part because of our diversified economy which helps insolate us from as much market volatility. As well, given the nature of the COVID environment, many companies today have realized the benefits of having a larger and less dense city to conduct operations.

Employees are redefining work and re-entry on their own terms. Business leaders need to redefine the role of their traditional workplace. Workers need to be confident in their health and wellness before they return.

We understand the vast majority of office employees around the country are looking for a hybrid office/work from home situation post-pandemic. Therefore, the office place will continue to play a substantial role in innovation, collaboration and culture creation.

RT: How can prospects contact you for more information?

Anné Erickson

M: 913-220-3636

D: 913-469-4657

Anne.Erickson@am.jll.com

linkedin.com/in/anne-erickson

7500 College Boulevard, Suite 920