Flight to Quality, Fractional Spaces & the World Cup Effect: Key Takeaways from MetroWire’s Retail-Office Summit

Kansas City, Sept. 23, 2025 — In a packed room on a rainy fall morning, MetroWire’s Retail-Office Summit convened top voices from Kansas City’s commercial real estate community to tackle a central question: What will define successful office and mixed-use projects in the next 3–5 years?

The consensus: tenants are demanding more—better design, more flexibility, curated amenities—and developers must rethink fundamentals to deliver in a market reshaped by COVID, rising construction costs and global events like the 2026 World Cup.

From Flex to Flight: The New Office Tenant Playbook

Tom Ward (Kessinger Hunter) kicked off with a market reality check: while early pandemic shifts saw tenants push for shorter, more flexible leases, today’s rising construction costs have reversed that trend. Tenants are now locking in longer terms, especially in Class A office spaces that offer modern amenities, walkability and energy.

“Flight to quality” remains dominant. Tim Ockinga (JE Dunn) added that landlords must now build spaces better than home offices to win talent back. That means open collaboration zones, cafes, on-site fitness with active programming, and ample “third places” within the office.

Andrew Brain (Brain Group) observed growing interest in fractional-use spaces — shared training rooms, conference suites and drop-in work zones that tenants can access without paying for full-time occupancy. His Park 39 project is now 98% leased, up from 50% pre-COVID, driven by flexible usage models.

Repurposing & Suburban Shifts

Ward noted that while C-class buildings continue to struggle, B-class space remains competitive in suburban markets. Urban locations are seeing selective conversions to multifamily, especially where tax credits are available.

On the construction side, Ockinga cited JE Dunn’s pivot to prefab manufacturing as a way to combat labor shortages and inflation. “Labor is the top constraint,” he said. “We’re innovating by building offsite in controlled environments—it’s safer, more efficient, and helps balance limited skilled workforce.”

Programming, Retail Synergy & Amenity Wars

Audrey Navarro (Clemens Real Estate) highlighted the value of retail as placemaking. Coffee shops, plazas and pop-up spaces help lease-up velocity in new mixed-use developments, especially in emerging submarkets.

But she stressed that it’s not just design; it’s about programming. Landlords like Corporate Woods are hiring staff to activate common spaces with workshops and community events, borrowing tactics from multifamily to boost tenant retention.

Above: Attendees of the MWM KC RETAIL + OFFICE SUMMIT networking before the panel discussion.

Capital Stacks & Creative Financing

Brain was blunt: “Office is a four-letter word to lenders right now.” His firm is front-loading equity—75% or more—on new deals while seeking nontraditional financing paths. Navarro shared a compelling recent deal on the Plaza where a seller, driven by legacy rather than returns, offered 2% seller-financing to achieve his desired valuation.

Where Economic Development Meets Real Estate

Samantha Jefferson (Kansas City Area Development Council) emphasized that company relocation decisions are increasingly tied to culture fit. Suburban settings appeal to distributed workforces; urban neighborhoods win with lifestyle and walkability. The key, she said, is matching space to company DNA.

She also noted the KCADC’s growing role in positioning Kansas City to national and international firms, especially ahead of the 2026 FIFA World Cup, which she called a “worldwide commercial for our region.”

Looking Ahead: 2026 and Beyond

Panelists were asked to forecast the next 3–5 years in office and retail:

• Ward: Flight to quality will continue. As interest rates ease, Class A leasing and development will pick up.

• Brain: Fractional space and flexibility will be key. Landlords must add shared-use environments to compete.

• Navarro: Kansas City must avoid a one-size-fits-all approach. Success will come from diversity of inventory.

• Ockinga: Corporate buildouts are on the rise again. Large tenants are ready to reinvest in headquarters space.

• Jefferson: The key to long-term growth? Talent. Kansas City must continue producing a skilled, accessible workforce.

The final word came on market activity expectations. Most panelists predict moderate gains in leasing and transactions in 2026, spurred in part by the World Cup and improving capital conditions.

Next Up at MetroWire: The Industrial Summit, Oct. 30, will explore trends shaping KC’s booming logistics and manufacturing landscape.

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Header image: The 2025 MWM Retail + Office Summit panelists from left to right–Tom Ward, Beck Johnson (Moderator), Samantha Jefferson, Tim Ockinga, Audrey Navarro, Andrew Brain, and Russ Pearson with BoxDevCo Real Estate at the podium.

Kansas City industrial experts tackle land scarcity, utility access and market opportunities

There may be a perception that land is scarce for industrial projects, but according to Morgan Mutert, director of business development and governmental affairs at Hunt Midwest, land is available. Still, it may not be development-ready to meet the tight timelines demanded by users.

Mutert, a panelist at MetroWire Media’s Kansas City Industrial Summit held last week, was joined by Michael Dustman, senior project manager at SCS Engineers; Kurt Jensen, SIOR, principal/industrial brokerage at Kessinger Hunter; Sam Stahnke, P.E., vice president at ARCO National Construction; and Sean Washatka, assistant vice president at Emery Sapp & Sons, Inc., to discuss the state of the industrial market and its challenges and opportunities. Joe Perry, vice president of real estate at Port KC, moderated.

“I think the users that we are seeing are really focused on speed to market. A lot of the projects that we’ve seen in the last year, two years, maybe even before that, when we receive the request, they want to be operational within 12 to 18 months, so they’re really looking for sites that check the box and that have the utilities and meet the labor force requirement. . . . Being able to meet their timeline is incredibly important,” Mutert said.

Mutert said projects used to be led by the availability of the labor force. While that remains a top requirement when users look for industrial sites, the availability of utilities is also vitally important.

“Utilities have become a big factor for any client right now. With some of the utilities, especially in Kansas City, having certain areas where they’re stretched as far as capacity is concerned, that becomes a big issue,” said Stahnke.

Jensen agreed that the availability of utilities is key to landing new industrial projects.

“I think utility nationally is really the conversation, and Kansas City, I think, can be well positioned to accommodate that. I think that as long as we can keep getting heavy power and the proper water to facilities, we’re going to see a lot of good activity in the next handful of years,” he said.

Mutert said if a site does not support the utility demand, it could add three years to the development timeline, which the project does not have.

According to Dustman, alternative power sources like solar could help solve utility shortages.

“We are putting solar on top of landfills. We are cleaning that solar and selling it back to the grid. . . . I think solar and utility usage is a big player, and we just need to find the sites,” Dustman said.

Above: Moderator Joe Perry of Port KC addresses the 2024 MWM Industrial Summit KC panelists at JCCC in Overland Park, Kan. Panelists from left to right: Sean Washakta, Kurt Jensen, Morgan Mutert, Sam Stahnke, and Michael Dustman. Photo credit: Jacia Phillips | Arch Photo KC

Another big factor in the site selection process for an industrial project is the availability of incentives, Mutert said.

Perry said that in the second quarter of 2024, there was a hyper-supply of industrial products with 2.3 million SF on the market in Kansas City. By the third quarter, that shrank to 700,000 SF.

Although industrial development projects have slowed down this year, Jensen said that has protected the Kansas City market from skyrocketing vacancies.

According to Jensen, demand from smaller operators in Kansas City remains strong.

“We’re starting to see a lot of clients who want to go to a building that’s just for them, so that becomes that 100,000, 150,000, maybe up to 300,000 SF building,” said Stahanke.

Perry said Kansas City currently has approximately 10.6 million SF under construction, with more than nine million of that being build to suit.

“It’s all preleased. So, we’re not really bringing a lot for next year. We just talked about 2.3 million SF hitting the market in Q2. Next year, we may only have 1 million SF for the whole year,” said Perry.

Reshoring nationally will be a big emphasis for the industrial market, especially in Kansas City, Jensen said.

Perry said in the last three years, manufacturing construction in the United States due to reshoring has nearly tripled from $100 billion in 2022 to just shy of $240 billion by the end of this year.

“We are genuinely just at the cusp [of reshoring]. We aren’t even prepared for what’s going to come in the next three, five, 10 years. So there’s a lot of opportunity out there, but also a lot of pressure to be able to deliver and make sure that we can reshore and bring things home. . . . I’m optimistic we’re headed toward a healthy 2025 where we’re going to see a lot of activity from reshoring, and a lot of build to suit activity will maintain that,” said Jensen.

Dustman said developers might look at repurposing existing buildings to create industrial space, citing a St. Louis client taking steps to convert an old 14-story health department building into a data center.

“The property sits at the juncture where the power comes in. . . . Maybe developers doing a little bit of utility research up front where those resources are already laid will expedite a little bit of timing,” he said.

Washatka said construction costs on industrial projects have not increased substantially in at least the last 12 months.

“I’ve got a feeling that 2025 is going to be about a flat year as far as growth in construction costs. So if lease rates are moving, it’s a good time to build, in my opinion,” Stahnke said.

Perry said that year over year, the industrial market is looking at an approximately five percent rent growth for the last quarter of this year.

“That’s pretty healthy,” said Perry.

New industrial projects create new jobs but can also result in a housing shortage. If there is increased residential construction activity in Kansas City and other markets, that could negatively impact available resources and drive

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Header image: MWM Industrial Summit KC attendees listen in on discussions related to the Kansas City Industrial sector landscape. Image credit: Jacia Phillips | Arch Photo KC

Opus industrial spec begins construction, leasing

Project developer, design-builder, architect and engineer of record, The Opus Group, has begun construction on Heartland Meadows Commerce Center, a 182,000-SF industrial development located within the Heartland Meadows Industrial Park.

It will be the first speculative building constructed in the Liberty, Mo. park within the last decade, yet another example of the current, unmistakable strength of Kansas City’s industrial market.

Kessinger Hunter has begun marketing space for up to eight tenants in the newly announced building.

“We’re thrilled to be leasing this new, modern space in the Kansas City market. It’s exciting to see how much the Liberty market has grown and continues to grow. There is demand for spaces like this in a well-established industrial park with a strong labor pool and will serve the needs of businesses and the community alike,” said Matthew Severns, principal in industrial brokerage at Kessinger Hunter.

The speculative development will provide four double entrances, 220 parking stalls, 32-foot clear height, up to 43 dock positions, two drive-in doors, and trailer parking.

Located at 2810 West Heartland Drive (northwest corner of Shepard Road and West Heartland Drive), the location offers nearby access to I-35 and U.S. Highway 69.

Each double entrance emphasizes a wide architectural design element that consists of contrasting colors and projecting canopies. The projecting canopies are designed with high-quality composite panels and illuminated soffits with available overhead wall area to accommodate tenant signage.

The warehouse space features clerestory windows for exceptional natural daylight and uses energy-efficient LED lighting. Construction is scheduled for an August 2021 completion date.

For leasing information, please contact Matthew Severns or Patrick McGannon at 816-842-2690.

Kessinger Hunter sees explosive post-pandemic opportunities for industrial marketplace

Before diving into detail regarding the state of the market “post COVID-19,” it is important to share that Kessinger Hunter employees and brokers are working remotely and doing their very best to stay active and engaged in business while taking care of their families, communities and clients first.

Many industry experts have been discussing what the commercial real estate world will look like once the virus passes and all the stay-at-home orders are lifted. Many of the national brokerage houses have held calls pontificating about the difficult times ahead for commercial real estate once the pandemic has passed. However, leaders and their discussions around the industrial space are concurring, and Kessinger Hunter agrees, that the bulk industrial marketplace will be stronger than ever.

Market conditions suggest three things are going to drive industrial real estate. All will put upwards pressure on space demand and rents.

• E-commerce – companies lacking online capabilities or an online presence are missing sales during the stay-at-home orders and are going to be proactive in establishing online capabilities for customers and clients moving forward. Exponential growth is expected in the space these companies lease. Real estate economists project for each $1 billion of new e- commerce business that is created, it drives an estimated need for 1.25 million SF of new industrial space. This growth alone is expected to create another 900 million SF of demand.

• Just-in-time warehouses – these warehouses typically only maintain enough inventory on hand to be able to deliver “just-in-time” to the end users. It is anticipated that these operators will add about 5% to their inventory on hand in the future. This is projected to create new demand for 1.2 billion SF of additional warehouse space.

• Near shoring – this group of businesses has been hurt by having manufacturing outside of North America. These companies are predicted to bring more manufacturing to the US which will give them greater control over their logistics. This will especially affect the Midwest area of the U.S. where the north-south supply chains go from Mexico to Canada.

It is for these main reasons that Kansas City, and the entire country at large, will see explosive growth once the world returns to “the new normal.” While industrial brokers and developers ride out this difficult time and prioritize taking care of family, the community, and clients, they must also be prepared to keep up with the new industrial norm.

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Daniel B. Jensen, SIOR is a principal for Kessinger/Hunter & Company, LC. Dan specializes in industrial brokerage and development on both a local and national level.

Dan is an inductee of the Midwest Real Estate News magazine 2016 Commercial Real Estate Hall of Fame, a member of the Society of Industrial and Office Realtors (SIOR), a member of the KC Area Development Council (KCADC), a board member of the Olathe Economic Development Corporation (EDC) and a member of the Council of Supply Chain Management Professionals (CSCMP). Dan has been active in commercial real estate since 1985.

If you are interested in submitting a guest column for the MWM Newsletter publication, please send to lisa@metrowiremedia.com for consideration.