EPC's McKeen sees stability in KC multifamily market

By Marcia Charney | MWM Contributing Writer

Stable. Steady. Cautious. Opportunity.

Those are the words Mike McKeen is using these days to describe the state of Kansas City’s apartment market. The principal and president of EPC Real Estate Group, LLC spoke to a record-breaking crowd of more than 150 brokers and real estate professionals at the April meeting of the Kansas City chapter of CCIM. 

Areas that will continue to succeed in the multifamily market will have “charm, character and are walkable, with jobs in good proximity,” McKeen said, noting that strong players currently include Lenexa City Center, downtown Overland Park, Olathe, Mission; and downtown Kansas City, Missouri, which leads the area in multifamily development. 

The living preferences of Millennials are driving the market. Some of EPC’s current products are Millennial-based, including Avenue 80 in downtown Overland Park, where Millennials comprise 70 percent of the tenant base. Empty nesters, who no longer want to maintain their homes and are seeking to live life a little differently, are another growing tenant segment.  

McKeen discussed how e-commerce is changing multifamily development. With the explosion of package delivery, developers are installing electronic parcel delivery systems, which allow tenants to retrieve packages by entering a security code. McKeen said that without these delivery systems, the buildings would need a massive storage room for delivered packages and staff to monitor receipt and storage.

McKeen said that developers now have to consider for the first time the amenities and unit size that Generation Z wants. He stated that studio apartments are the “quickest thing to fly off our lists right now because they hit a certain price point of affordability but they also cater to that lifestyle of people who spend most of their time playing video games.” McKeen added that the amenity most requested by Gen Z is blackout shades for better game screen visibility. 

McKeen discussed the challenges currently facing multifamily developers which include a decline in the number of skilled craftsmen; the threat of tariffs, causing suppliers to raise prices to offset the impact of possible future tariffs on costs; future tax treatment; the passage of city ordinances which impact the use of development incentives; aging infrastructure; low supply and high demand, particularly for precast concrete products; and rising operating costs.

McKeen also recognized new opportunities for multifamily developers such as the creation of new inventory to meet the demands of Millennials and empty nesters, affordable housing, and opportunity zones. In addition, new product types like micro-units, which range in size from 350 to 500 square feet, are in high demand with rising rents.  

Noting that “site selection is everything now,” McKeen said the average occupancy of multifamily properties in the Kansas City area has remained steady, staying between 93 and 95 percent.  

Elite Sports announces $25M investment in five facilities across KC region

Elite Sports will invest $25 million in five youth sports facilities across the Kansas City region, bringing the Olathe-based company's total footprint to 650,000 square feet. 

The new facilities also will bring more than 500 new jobs to the metro area, according to a release from the sports development and management company. 

"Our new facilities are paving the way for local clubs - practice is no longer a drop-off, but a lifestyle that goes well beyond the sport, and a unique experience that parents can enjoy as well," said Jason Bryson, CEO of Elite Sports.

The new, multi-sport facilities offer a one-stop shop for local athletes and parents with amenities such as medical clinics, fitness gyms, sports massage, classrooms, parent workstations, lounges, arcades, full-service bars, and nail salons. 

In addition to state-of-the-art technology and equipment for training, the facilities go beyond the sport and introduce youth athletes to life skills through various educational classes and opportunities.

Clubs and leagues including MAVS Volleyball, Elite Softball Academy, Kansas City Scott Gallagher and Heartland Futsal call the facilities home. Elite Sports will also offer rental space to other metro-area clubs for multiple sports. The facilities will host local, regional and national tournaments.

"Not only do our facilities provide outstanding benefits for athletes and parents, but to entire communities and the general public as well," Bryson said. 

Elite Sports will offer memberships to its fitness gyms and classes, known as The Burn KC. Two of the five planned Elite Sports centers - Olathe and Overland Park - opened earlier this year, and the remaining three facilities in Lenexa, Olathe and Kansas City plan to open later in 2018.

Tuscan design makes a comeback in new Barsto multifamily project

Barsto Construction officially broke ground on The Villas at Ridgeview Falls, a 237-unit luxury apartment complex on the northeast corner of 119th Street and South Ridgeview Road in Olathe.

Developed by J.A. Murphy Group based in Knoxville, Tenn., The Villas at Ridgeview Falls was designed by NSPJ Architects P.A. and will typify a highly detailed, large scale Tuscan Villa through traditional design elements. 

NSPJ brought the vision to life yet maintained "human scale" by using materials true to the original vernacular, according to a release. Visitors will be greeted by lush landscaping at the main entrance, with a single-story club/amenity center just off the main drive for easy access. The rooflines will be sloped to create the sense of a single-family home entrance, opening into a large courtyard that serves as the development's centerpiece.

Additional community amenities include private grilling areas, center pavilion, resort-style pool, fire pit, and fitness trail. Apartments will include large floorplans with luxury finishes, 9-to-10-foot tall ceilings, and 8-foot tall doors. 

Site preparation is underway with plans to go vertical in the first quarter of 2018 and the first units ready for occupancy in the fall. 

This is the third project for the team of Barsto Construction and J.A. Murphy Group, which recently completed the $32 million Metcalf Village Apartments at 162nd Street and Metcalf Avenue.

Lee's Summit study finds city is ripe for fresh multi-family development

The City of Lee’s Summit could support up to 2,300 additional market rate apartments over the next decade beyond existing supply or projects in the pipeline, according to a 2017 multi-family housing study commissioned by the Lee’s Summit City Council and conducted by Vogt Strategic Insights.

“Lee’s Summit continues to see strong activity and interest in multi-family construction, and this study will help inform the city’s economic development decisions as it considers future projects,” Ryan Elam, director of the Lee’s Summit Development Center, said in a release.

Multi-family construction in Lee’s Summit dried up after the 2008 housing crisis but saw signs of life in 2016 when NorthPoint Development opened The Residences at New Longview, a 309-unit, luxury apartment community that saw the developer’s fastest lease-up to date. 

“New Longview’s success essentially became a proof-of-concept for Lee’s Summit multi-family development, leading to a sharp uptick in permits and proposed projects,” said Lee’s Summit Economic Development Council President Rick McDowell. “In 2016, the city approved five new apartment complexes, for a total of more than 1,400 living units.”

The study found that Lee’s Summit’s existing market is very strong with a 98.4 percent occupancy rate, with about 30 percent of renters coming from outside the area. In addition to identifying strong capacity for market-rate apartment development, the study found that Lee’s Summit could support up to 503 additional units of age-restricted housing, as well as up to 400 additional units of affordable apartments.

To conduct the study, Vogt Strategic Insights completed a field survey of 27 apartment projects in Lee’s Summit and 101 projects throughout the region, comparing rents and amenities among more than 22,000 rental units in Independence, Blue Springs, Grandview, Overland Park, Olathe, Lenexa, and Lee’s Summit.

The 200-page housing study considered factors such as demographics, population growth forecasts, household income and the regional suburban Kansas City apartment market, and used a conservative 4.4 percent predicted growth in households over the next 10 years.