KANSAS CITY, KANSAS (February 17, 2021) – The multifamily supply wave has crested in Kansas City. According to a pipeline report from NorthMarq’s Multifamily Investment Sales team, the market saw record delivery of new apartments in 2020 with more than 5,900 units. This equals 4.1 percent growth on existing inventory, but with lighter growth of 2.8 percent projected in 2021.
“After a big wave of development delivery, some are questioning whether the market is receding, but 2.8% still equals more than 4,000 new units in 18 developments, which are taking shape in all but one of the metro’s 17 submarkets,” said Jeff Lamott, managing director – Investment Sales.
Downtown’s pipeline currently has 5,400 units planned, under construction or in lease-up. This exceeds the combined pipelines of the next two most active submarkets (Overland Park South and Olathe/Gardner.). However, developers are closely eyeing potential movement in this pipeline due to the recent passing of affordable housing legislation. A new ordinance in Kansas City, Missouri requires any project seeking incentives to set aside 20 percent of the unit count for residents earning under specific median income thresholds.
“There are 20+ developments in some sort of planning phase in the core of Kansas City, MO (Downtown, Midtown, Plaza), which equates to 30% of the total planned pipeline. I’m hearing this bright sentiment from developers – ‘we’re not sleeping on the suburbs.’ The planned pipeline shows three (projects) in North Kansas City, two in Belton, a second in Independence, and these aren’t just local developers,” said Gabe Tovar, vice president-Investment Sales. “It’s a sign of Kansas City’s economic strength when regional and national developers are pioneering multiple new pockets across the market.”
A few other key findings:
- Across the metro, there are nearly 6,000 units currently in lease-up and another 6,000 under construction slated to deliver in 2021 and 2022.
- Overland Park South continues to be the suburban leader with the most units under construction, however, is being closely followed by Shawnee/Lenexa and Olathe/Gardner.
- 28 percent of developments under construction are located in the urban core submarkets of Downtown and Midtown.
- The most active national and local developers in the market are Milhaus and Block Real Estate Services, respectively.
NorthMarq’s Kansas City office provides a full-service approach to multifamily investment with expertise in originating debt, raising equity and executing investment sales. The investment sales team is comprised of Jeff Lamott, Managing Director-Investment Sales, Tovar, and Bayley Pinney, Transaction Manager. Greg Duvall leads the seven-person debt and equity team.