Kenco selects Liberty Logistics Park for new facility

Kenco Logistics Services, LLC has selected a 295,600-SF warehouse and distribution space for their new facility at Liberty Logistics Park in Liberty, Mo.

“We are excited that Kenco Logistics, one of the top ten logistics companies in the world, selected the Liberty Logistics Park and our community for their new facility,” said Lyndell Brenton, mayor of the City of Liberty.

“Their decision to locate here reinforces Liberty’s place as a growing logistics and distribution hub in the Midwest. While Liberty Logistics Park is still under construction, we believe our community values, location and "can do” attitude are the differentiators that attract new businesses, like Kenco Logistics, to Liberty, Brenton said.

In the past five years, the KC region has successfully attracted eCommerce and distribution companies pledging to create more than 10,200 jobs, invest $1.8 billion and occupy 16.7 million square feet, according to a release.

“The KC region’s central location and access to a skilled workforce are key drivers of a successful eCommerce strategy,” said Tim Cowden, president and CEO of the Kansas City Area Development Council.

“The KC SmartPort team and our partners in Liberty continue to elevate our region’s competitive advantages to position KC as a leading logistics hub,” Cowden said.

The Kansas City Area Development Council worked with a number of regional partners in attracting Kenco to the Kansas City region, including the State of Missouri, Missouri Partnership, City of Liberty, Missouri, Liberty Economic Development Corporation, CBRE - Joe Orscheln, Evergy, Spire Energy and KC SmartPort.

“It is fantastic to see and support the growth in the logistics and distribution industry in Liberty and the entire KC region,” said Subash Alias, CEO of Missouri Partnership.

“The status of Missouri as North America’s Logistics Center is already well known, and more and more companies, such as Kenco, are taking advantage of one of the best river, road, air and rail infrastructure systems in the nation. When it comes to logistics and distribution, Missouri is a global leader.”

Kenco Logistics Services, LLC

Kenco is the largest woman-owned third-party logistics (3PL) company in the United States. The company provides integrated logistics solutions including distribution and eCommerce fulfillment, comprehensive transportation management services, material handling equipment services, engineering and innovation consulting, and information technology. For more information, visit kencogroup.com.

Industrial market flying smoothly through 2020 turbulence

Despite the economic turbulence COVID-19 has unleashed on 2020, the industrial real estate market seems to have buckled in for a relatively smooth ride, according to a recent CCIM KC panel.

Brent Miles, chief marketing officer and founding partner of NorthPoint Development and Joe Orscheim, SIOR, CCIM, senior vice president of CBRE, joined moderator Ben Boyd, CCIM Kansas City director of programs and vice president of Colliers International, for a webinar discussion last Friday about the state of the industrial market.

Both Miles and Orschein agreed that e-commerce is the major driver strengthening the industrial market as online shopping has exploded during the pandemic. Miles noted that increased demand for industrial space for companies like Amazon and Chewy is COVID-related, but he thinks the expansion represents a permanent change. 

“They are the infrastructure and the plumbing of how we’re getting goods,” Miles said.

According to Miles, NorthPoint Development, which owns approximately 75 million square feet of industrial properties across the United States, saw only about 5 percent of its clients request and receive rent relief.  

Orschein said he anticipated more requests from tenants for rent abatement than actually were made. Landlords, he said, used the requests as an opportunity to obtain updated financials, and in some instances, to extend the lease term by the number of months they abated rent. 

“It was good for both parties. It’s always good for a landlord to show that they’re looking out for their customer and obviously they want them to be financially strong so the project remains successful,” Orschein said.

Miles said that availability of labor remains a concern in the industrial market, with uncertainty about how future stimulus or bailout legislation will affect unemployment and labor. 

Orschein noted that there is a challenge to find “really good tracts that are ready to go” in the Kansas City area in order to satisfy demand. “We’re getting weekly calls from out of town developers and capital sources that are looking to land here in Kansas City, and we just need more land. We’ve got to figure it out. There’s strong demand, and we’re not seeing any kind of a slowdown so we’re encouraging everyone to just keep putting them up and we’ll all fill them,” said Orschein. 

Orschein also noted that rental rates in the Kansas City industrial market are “pretty steady and level” and that he is seeing lower cap rates. He anticipates that the local industrial market will see one or two big institutional players enter by the end of the year. 

“Everybody is taking note of Kansas City,” Orschein said.   

According to Orschein, there is strong demand for industrial space for the food industry; however, the challenge is to figure out food requirements and freezer cooler needs. 

“It’s obviously very expensive and highly specialized, but the need is there. We’ve just got to figure it out in Kansas City. In the industrial world, it seems like after the first couple of weeks of COVID hitting, it’s like everybody just got on the same page and said let’s all get back to work and keep the train moving,” Orschein said.

KC leads the nation in lowest vacancy rate for 2019 industrial construction

Kansas City leads the nation with the lowest vacancy rate for 2019 industrial construction completions, according to a recent report from CBRE.

Developers completed construction of 289 million SF of industrial and logistics real estate in the U.S. last year, but any concerns of oversupply are tempered, as only 39 percent of space in new construction was available.

Deliveries outpaced the 255 million SF of new absorption, but with robust leasing from occupiers, especially e-commerce and retail firms that often require modern building design and amenities, supply and demand dynamics remain healthy.

“With national vacancy at 4.4 percent, it was becoming difficult for occupiers to find modern space,” said James Breeze, CBRE Global Head of Industrial & Logistics Research.

Another major factor contributing to the strong absorption of new construction is the increase in built-to-suit development—the construction of space for a specific space user. This segment made up 28.1 percent of new construction activity, as companies increasingly need unique requirements to meet their specific demands.

“This new supply is needed and will keep transaction activity strong, especially for larger deals. The robust activity in newly constructed product also warrants the large amount of groundbreakings we continue to see," Breeze said.

In markets with over 4 million SF of new development, Kansas City finished 2019 with the lowest overall vacancy rate for 2019 construction completions at 7.3 percent, followed by Miami, Baltimore, and Greenville, SC, which all had vacancy rates for newly constructed product under 20 percent. Dallas-Fort Worth was the strongest core market, with nearly 75 percent of the 25 million SF completed in 2019 taken.

“The statistics tell the story, there is still very strong demand in Kansas City from a wide variety of industrial users,” said Joe Orscheln, a senior vice president in CBRE’s Kansas City office. “The majority of the space delivered in 2019 was speculative, which speaks even further to market demand.”

According to the report, supply fundamentals should remain stable this year, as already 33 percent of the 309 million SF under construction nationwide is already accounted for. A pre-leasing rate of 25 percent for under-construction product typically are indicative of a solid leasing environment.

“With pre-leasing robust for under construction projects, the overall vacancy rate is expected to remain in check in the foreseeable future,” said Breeze.

Read full CBRE Report here.

Coming Soon: Lane4's Liberty Logistic Center

by MWM Staff

LANE4 Property Group plans to break ground within a month on a major development in Liberty, Missouri.

The new development, named Liberty Logistics Center, will be located on a 68-acre tract of land at MO Highway 69 and Liberty Parkway, adjacent to the Ford Assembly Plant and visible from Interstate 35.

“We love this project for a variety of reasons,” said Hunter Harris, partner at LANE4. “Because of its immediate access to I-35 and 10-minute access to I-70, the site is ideal for distribution and logistics-focused users looking for supply chain advantages. Liberty is one of the fastest growing communities in the region, responsive to economic development and a prime location for a growing workforce. Overall, this project encompasses all the characteristics we look for when deciding where to invest.”

The development will feature three large buildings, built on a speculative basis, available for commercial manufacturing and distribution operations.

The largest and first to be constructed building will be 741,000 SF with 36-floor ceilings and up to 146 dock doors. The two smaller buildings will be 80,000 SF and 132,000 SF with 32-foot ceilings, accommodating smaller users. All the buildings will feature 50 by 50-foot column spacing with 60-foot speed bays, office storefronts and clerestory windows around the exterior.

Additionally, the development will include a retail portion, Liberty Parkway Plaza, containing eight pad sites fronting I-35 and the Logistics Park. These pads are ideal for restaurants and retailers to cater to the logistics center tenants and employees, as well as the surrounding population.

This development embodies LANE4’s evolution from a retail-focused brokerage firm to a geographically-focused, full-service firm developing multiple asset classes. The transition into multifamily, senior living and industrial projects began with the firm’s first mixed-use project, 39Rainbow in Kansas City, KS in 2012.

Since then, LANE4 has invested heavily in non-retail assets through both acquisition and development, and now maintains a well-diversified portfolio.

“We’ve developed a solid set of real estate fundamentals that guide our endeavors. Our strength is in understanding the commercial real estate landscape of Kansas City and the Midwest region, and recognizing the potential for successful projects, regardless of asset class,” Harris said.

Construction is expected to begin within a month and the first of three buildings will be complete in late 2020.

LANE4 Property Group serves as the developer for the entire project as well as leasing/sales agent of the retail component. Joe Orscheln with CBRE is providing industrial leasing services. Architecture and engineering services are provided by Davidson Architecture and Engineering.