Kansas City Q4 Market Report: Rents and Vacancies Both Tick Higher to Close 2018
Highlights
- The Kansas City multifamily market recorded mixed performance during the fourth quarter and for the full year of 2018. Vacancy inched higher, but rents posted strong gains and absorption was healthy. Apartment builders were active, creating some supply-side pressures in a few submarkets.
- Vacancy ended 2018 at 5 percent, up 60 basis points from one year earlier. The vacancy rate rose 20 basis points in the fourth quarter.
- The past year proved to be a particularly strong period for rent growth, with asking rents advancing by 5.2 percent to $929 per month. Class A properties recorded an average annual rent increase of 5.4 percent.
- Sales of apartment buildings were largely consistent in 2018. Activity was steady from quarter to quarter, although the overall number of properties sold in 2018 was a bit lower than in 2017. Class A and Class B cap rates compressed slightly, averaging 5.5 percent for the year. Cap rates in Class C buildings have remained above 6 percent.
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